Gold prices in Dubai plunged below Dh500 per gram on Monday evening, losing approximately Dh17 per gram, as prices hit a seven-month low amid Middle East geopolitical tensions and high oil prices.

According to Dubai Jewellery Group data, 24K gold prices fell to Dh499.75 per gram on Monday evening, down from Dh516.50 per gram over the weekend.

Similarly, 22K, 21K and 18K gold prices also fell to Dh462.75, Dh443.50 and Dh380.25 per gram, respectively.

Spot gold plunged three per cent to $4,149 per ounce.

"Gold is down three per cent today, and the story goes beyond just a simple risk-off sentiment. The lack of progress in US-Iran diplomacy keeps geopolitical risks alive, but it also keeps oil and inflation risks firmly in the picture. Market participants are starting to face the reality of a high-interest-rate environment as the Fed may have positioned to front-load rate hikes. At the same time, higher Treasury yields make gold harder and harder to hold as rates keep recording levels untested in a generation," said Ahmad Assiri, market strategist at Pepperstone.

He added that Monday's drop was a sharp move in historical context.

(Source: Khaleej Times)