Dubai gold extends January rally, crosses Dh610 on global fears

Dubai: Gold prices in Dubai edged higher on Tuesday, extending a steady run that has lifted local rates sharply since the start of the month, tracking a powerful global rally in bullion.

By 10.45 am, the price of 24-karat gold stood at Dh610.50 per gram, up from Dh603.50 on Monday. The 22-karat variety rose to Dh565.25, compared with Dh558.75 a day earlier. The move keeps local prices near recent highs and firmly above levels seen just a week ago.  (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Strong surge in local prices

Dubai gold prices have risen consistently through January, reflecting strong momentum in international markets. At the start of the month, 24-karat gold traded close to Dh520 per gram before pushing past Dh550 by mid-January. The rally gathered pace in the second half of the month, with prices moving through Dh570, then Dh590, before crossing the Dh600 mark this week. The 22-karat rate followed a similar path, climbing from the low Dh480s early in January to above Dh560 by Tuesday.

The steady advance highlights growing investor demand and a sharp shift in sentiment towards safe-haven assets.

Global gold holds above key levels

Internationally, gold held above $5,000 an ounce for a second consecutive day, supported by a weaker US dollar and rising geopolitical tensions. Bullion climbed as much as 1.4% on Tuesday, marking a seventh straight session of gains. A sharp rally in the Japanese yen and speculation around coordinated support for the currency weighed on the dollar, making gold cheaper for buyers outside the United States.

Market anxiety has also been fuelled by renewed trade tensions. President Donald Trump warned of higher tariffs on South Korean goods and repeated threats towards other major trading partners, unsettling currency and bond markets. Silver also surged, rising more than 7% during the session.

Fear trade back in focus

Gold’s latest surge reinforces its role as a barometer of market stress. The metal has more than doubled over the past two years and is already up about 17% this year, following its strongest annual performance since 1979. Investors have increasingly retreated from sovereign bonds and currencies, a trend often described as the debasement trade.

A heavy selloff in Japanese government bonds has added to concerns, highlighting investor unease over fiscal expansion and rising debt levels. Geopolitical risks have compounded those fears, with recent US policy moves and rhetoric shaking confidence across global markets.

Positioning points to further volatility

Speculative positioning shows growing conviction behind the rally. Options traders are bracing for further upside, with implied volatility on Comex gold futures climbing to its highest level since the height of the Covid-19 pandemic in March 2020. Volatility on the SPDR Gold Shares exchange-traded fund has also moved sharply higher, reflecting heightened demand for protection.

Attention is now turning to US monetary policy. Investors are awaiting President Trump’s choice for the next Federal Reserve chair, after he said interviews have concluded. Expectations of a more dovish appointment have strengthened bets on further rate cuts later this year, a supportive backdrop for non-yielding assets such as gold.

In the near term, markets widely expect the US central bank to pause its rate-cutting cycle at its upcoming meeting, following signs of resilience in the labour market. Even so, traders say the combination of currency weakness, policy uncertainty and geopolitical risk continues to favour gold, keeping upward pressure on prices in Dubai and globally.