By: Economy Middle east

Gold inched lower on Monday, pressured by a stronger dollar and rising crude oil prices, as investors awaited U.S. President Donald Trump’s decision on a proposed deal to extend the ceasefire with Iran. 

Spot gold was down 0.14 percent at $4,516.47 per ounce, after hitting a two-week high in the previous session, while U.S. gold futures for August delivery fell 1.4 percent to $4,545.01. The dollar rose during trading, making greenback-priced bullion more expensive for holders of alternative currencies.

Retail bullion rates record downward trend in the UAE

In line with international market movements, retail gold rates within the UAE registered a downward trend. The local prices for the various carats stood as follows: 24-carat gold settled at AED547.50, while 22-carat gold reached AED507.00. Additionally, the price for 21-carat gold was recorded at AED486.00, followed by 18-carat gold at AED416.75, and 14-carat gold at AED325.00.

Geopolitical tensions and monetary policy implications

President Trump said on Friday he would soon decide on a proposed deal to extend the ceasefire with Iran, though the two countries still appeared to differ on significant issues that have been central to the conflict. Meanwhile, Israeli Prime Minister Benjamin Netanyahu ordered troops to move further into Lebanon in the battle against the Iranian-backed Hezbollah militant group, despite a ceasefire announced more than six weeks ago.

Driven by these escalations, oil prices rose more than 2 percent in early trading on Monday, stoking broader corporate concerns around inflation and potential interest rate hikes. While gold is traditionally utilized as a hedge against inflationary pressure, it loses its structural appeal in a high interest-rate environment due to its status as a non-yielding asset. Federal Reserve Vice Chair for Supervision Michelle Bowman noted on Friday that the Middle East war’s impact on the economy, while still being measured, could lead to persistent rises in inflation that might require a tighter monetary policy stance.

In alternative precious metals, spot silver rose 0.88 percent to $75.54 per ounce, platinum gained 0.65 percent to $1,942.10, and palladium rose 1.05 percent to $1,353.00.