Dubai gold hits Dh506 and the data shock from Washington could push it even higher

Dubai: Dubai’s gold market continued to push higher on Friday, with retail bands posting some of their strongest levels this month. The 24-carat segment traded close to Dh506 per gram, well above last week’s Dh481 average. The 22-carat category held near Dh468.75 after recovering from a brief dip to Dh465.25 on Thursday. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Local prices have trended steadily upward this month. Retail rates for 24K hovered between Dh480 and Dh483 through the first week of November before accelerating toward the Dh495 to Dh506 range over the past five sessions. The 22K band followed the same pattern, rising from around Dh444 in early November to nearly Dh469 by mid-month.

The sharpest gains have come in the past four days, reinforcing the strength of the current rally.

Global uncertainty adds fuel

The upswing mirrors movement in international bullion markets. Gold was trading near $4,190 an ounce on Friday and is on track for its best week in a month, with a gain of around 5%. The metal has clawed back most of the losses from the previous session and continues to benefit from a return to safe-haven positioning.

Investors remain uneasy about the backlog of economic data that will be released once Washington resumes normal operations after a six-week government shutdown. Market watchers are divided on whether this wave of numbers will reveal enough weakness to justify a US rate cut.

Gold has gained close to 60% since the start of the year and is set for its strongest annual performance since 1979. Central banks have been significant buyers, building reserves to diversify assets and protect against fiscal stress. Investor flows have accelerated for the same reasons, with sentiment leaning toward caution rather than risk-taking.

Debate over Fed policy

Some of the week’s optimism around a potential US rate cut faded after Federal Reserve officials signalled little urgency to ease borrowing costs. Even so, bullion continues to draw support from the prospect of fresh liquidity injections.

The Federal Reserve Bank of New York’s Roberto Perli said the central bank “won’t have to wait long” before purchasing assets to maintain the desired level of liquidity in the financial system.

Last month, policymakers confirmed they would stop shrinking the balance sheet from December 1 after volatility emerged across short-term funding markets, a move that traders view as supportive for gold.