By: Economy Middle east

Gold prices appreciated on Tuesday amid expectations of a de-escalation in Middle Eastern tensions; however, the metal remains on track for its most significant monthly decline in over 17 years as elevated energy costs reduced the likelihood of U.S. interest rate cuts this year, as reported by Reuters.

Spot gold rose 0.80 percent to $4,564.19 per ounce by 09:00 UAE time, while U.S. gold futures for April delivery increased 0.77 percent to $4,592.37. 

In the UAE, gold rates experienced an upward adjustment. The price of 24K gold rose AED7.25 to AED549.00, and 22K gold grew by AED7.00 to AED508.50. Additionally, 21K gold moved up AED6.50 to AED487.50, 18K gold climbed AED5.50 to AED417.75, and 14K gold saw a rise of AED4.50 to AED326.00.

The U.S. dollar weakened, enhancing the affordability of dollar-priced commodities for international buyers. This follows a Monday report from the Wall Street Journal stating that President Trump informed aides of his willingness to conclude military operations against Iran, even if the Strait of Hormuz remains largely inaccessible for the time being.

Rate-cut hopes fade

Despite recent gains, bullion has dropped more than 13 percent this month, marking its sharpest downturn since October 2008 due to a robust dollar and diminishing hopes for rate cuts. Nevertheless, prices remain approximately 5 percent higher for the quarter. Investors have largely dismissed the probability of a Federal Reserve rate reduction in 2026, as high energy prices are expected to contribute to broader inflationary pressures.

Prior to the regional conflict, the CME Group’s “FedWatch” tool indicated expectations for two rate cuts this year. Because gold is a non-yielding asset, it typically performs better in low-interest-rate environments. Goldman Sachs noted that it maintains a target of $5,400 per ounce by the end of 2026, citing central bank diversification and eventual Federal Reserve easing.

In other precious metals, spot silver climbed 2.44 percent to $72.19 per ounce, spot platinum rose 1.16 percent to $1,913.00, and palladium increased 1.51 percent to $1,415.00.