Gold prices in Dubai: Rates to stay high amid US-China tariff row confusion, geopolitical tensions
In addition, expectations around the easing of monetary policy and geopolitical tensions in the Middle East will also support the precious metal in the coming months.
After hitting a record high of $3,500 per ounce globally and Dh420 per gram in Dubai last week, the precious metal slipped $3,318.47 per ounce and Dh400 per gram over the weekend.
Analysts expect gold could soon touch $3,450 again if the economic and geopolitical uncertainties persist.
'Tensions between the world's two largest economies intensified further with reports that China has cancelled a series of Boeing aircraft orders, citing a need to 'reassess strategic priorities'. Although Chinese authorities have not issued any official statements regarding the move, analysts widely interpret this as a form of indirect economic retaliation, meant to signal that Beijing is also capable of leveraging market power to apply pressure on Washington,' said Linh Tran, market analyst at xs.com.
The precious metal rally slowed after the US and China exempted certain goods from tariffs in the growing tariff war between the two countries.
US President Donald Trump said on Friday that negotiations with China on tariffs are underway, and Beijing denied any talks taking place with Washington DC.
China has reportedly warned that it will retaliate against any country that cooperates with the US in ways that undermine Beijing's interests.
'As the US-China trade war risks spilling over to other countries, global investors are turning increasingly cautious. In this climate, gold remains a strategic safe haven, particularly as capital flows exit equities and other risk assets in search of safety,' she added.
US recession concern
Ahmad Assiri, research strategist at Pepperstone, said while the market looks for direction, should the pace of selling increase, technical support is seen at the psychological level of $3,300 and $3245.
'A resurgent dollar or higher US equity prices could also test gold's resolve, making further profit-taking of gold longs into rallies a possible tactical move,' he said.
Assiri added that one of the compelling reasons that is holding metal is the evolving risk of a US economic recession in the coming 12 months, which is currently implied at 52 per cent.
'In an environment where the US recession probability could go either way, where the data will guide the market's assumptions, gold shines as a powerful safeguard against downside growth risk for institutions and traders alike.'
Rate cuts, regional tension
Beyond trade concerns, Linh said monetary policy remains a key pillar supporting gold's uptrend.
'Signs of cooling inflation have quickly reshaped expectations for the US Federal Reserve's policy trajectory. The market now leans toward the likelihood of rate cuts beginning in September, or potentially even earlier if economic data continues to soften. In such an environment, gold tends to thrive,' she added.
In his latest remarks, Fed chief Jerome Powell struck a cautious tone, acknowledging strong March retail sales but emphasising that economic growth remains fragile. He reiterated the Fed's readiness to act if more definitive signs of slowdown emerge. These dovish signals have further strengthened the belief that a rate-cutting cycle is approaching — a historically bullish development for gold.
'The confluence of trade conflict, rate cut expectations, and geopolitical uncertainty has propelled gold to its latest all-time high near $3,385/oz. If no major policy or economic shocks emerge to reverse the trend, and if current drivers remain intact, gold could continue climbing toward key psychological levels such as $3,400 and $3,450 in the near term."
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