By: Economy Middle east

Gold prices rose slightly on Monday due to a weakening dollar. However, these increases were limited by rising energy costs, which intensified concerns regarding inflation and decreased the likelihood of Federal Reserve rate reductions during 2026.

Spot gold appreciated 0.14 percent to $4,500.03 per ounce by 09:07 Dubai time. Similarly, United States gold futures for April delivery increased 0.11 percent to $4,529.45.

The U.S. dollar declined, which increased the affordability of dollar-denominated goods for investors utilizing alternative denominations.

Gold rates in the United Arab Emirates recorded a slight appreciation. The price of 24K gold increased AED0.25 to AED541.50, while 22K gold remained consistent at AED501.25. Furthermore, 21K gold rose AED0.25 to AED480.75. Both 18K gold and 14K gold maintained their levels at AED412.00 and AED321.50 respectively.

Brent crude increased beyond $115 a barrel after the Middle East conflict intensified during the weekend. This contract has appreciated 60 percent during March, representing a record monthly growth.

Market participants anticipate a low probability of a United States interest rate reduction during 2026, as elevated energy costs risk contributing to widespread inflation and restricting the potential for monetary policy adjustments. This assessment contrasts with the two rate reductions anticipated prior to the start of the conflict.

Although inflation generally enhances the attractiveness of gold as a protective asset, increased interest rates impact the demand for this non-interest-bearing commodity.

Gold has decreased by more than 14 percent during this month, representing its most significant monthly reduction since October 2008. This downward trend is attributed to the United States dollar, which has appreciated by more than 2 percent since the Middle East conflict commenced on February 28, according to Reuters.

Physical silver increased 0.67 percent to $70.23 per ounce. Spot platinum increased 2.58 percent to $1,911.00, while palladium rose 2.79 percent to $1,401.00.