Gold prices have hit a two-week low, slipping as a stronger US dollar and shifting expectations regarding Federal Reserve interest rate hikes dominate the market. Investors who previously sought refuge in bullion to hedge against Middle East instability are now pivoting their focus toward U.S. monetary policy, causing demand for the metal to wane. This downturn has been mirrored in the physical market, particularly in Dubai, where retail prices have dropped significantly. While this decline has deterred some investors, it is proving to be a welcome development for local shoppers, as more affordable rates entice bargain hunters back into jewellery stores during the summer season.

Despite the recent sell-off, long-term sentiment among experts remains cautiously optimistic. Analysts suggest that while short-term volatility persists due to cooling geopolitical tensions and the prospect of elevated interest rates, the fundamental drivers for gold—such as aggressive central bank reserve accumulation and broader portfolio diversification—remain firmly in place. Major financial institutions continue to maintain bullish price forecasts, viewing the current dip as a temporary adjustment rather than a structural collapse. Ultimately, the future trajectory of gold prices will likely hinge on incoming US inflation data, which will serve as a critical indicator for the Federal Reserve’s upcoming policy decisions.