Gold seen holding above $4,400 as geopolitics offset rate risks

Vijay Valecha, Tue, Sept 8, 2026 Khaleej Times

Analysts remain broadly bullish on gold despite higher US yields and rate hike expectations, citing central-bank buying, geopolitical tensions and resilient investor demand
Gold prices are likely to remain supported above the $4,400-an-ounce level despite mounting pressure from stronger US economic data and the prospect of higher interest rates, with analysts pointing to geopolitical risks, central-bank purchases and investor demand as key pillars underpinning the precious metal’s rally.

Spot gold edged 0.2 per cent lower to $4,396.19 an ounce on Tuesday, while US gold futures for December delivery fell 0.8 per cent to $4,441.30, according to Reuters data. The decline came as rising oil prices heightened inflation concerns and reinforced expectations that the Federal Reserve could tighten monetary policy further, increasing the opportunity cost of holding non-yielding assets such as gold.

The pullback was also reflected in the UAE market. In Dubai, 24K gold traded at Dh530 per gram on Tuesday evening, slightly below Monday’s Dh530.75. Other categories were priced at Dh491 for 22K, Dh470.75 for 21K and Dh403.50 for 18K gold.

Vijay Valecha, Chief Investment Officer at Century Financial, said a weaker US dollar has helped bullion recover from its recent pullback. “Investor demand remains a key pillar of support,” he said, pointing to renewed inflows into gold-backed exchange-traded funds and continued central-bank purchases. China’s central bank added 650,000 ounces to its reserves in August, extending its buying streak to 22 months.

Valecha cautioned that rising oil prices and inflation risks linked to disruptions in the Strait of Hormuz could keep markets volatile and strengthen the case for higher interest rates. Nevertheless, he said gold retains a “positive bias above $4,400”, with a sustained move beyond $4,435 potentially opening the path towards $4,500 an ounce.

For now, analysts broadly agree that while inflation data and Federal Reserve decisions may drive short-term swings, structural demand and geopolitical uncertainty continue to support the longer-term outlook for gold.

Source
Khaleej Times