Dubai gold sets another record, making jewellery and savings more expensive

Dubai: Gold prices in Dubai extended their rally on Wednesday morning, with 24-karat gold trading at Dh542 per gram and 22-karat at Dh502 as of 9.25 am. The move follows Tuesday’s all-time high of Dh540.25 for 24-karat gold and the first breach of Dh500 for 22-karat at Dh500.25. A month ago, on November 24, prices were Dh495 and Dh458.50. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Globally, spot gold topped $4,500 an ounce Tuesday amid US-Venezuela tanker seizures and bets on more Federal Reserve cuts. Silver hit $72.70, and platinum soared past $2,300, both on track for historic yearly gains.

Geopolitics and dollar weakness sustain rally

Escalating risks from Venezuela tanker blockades, China-Japan frictions, Eastern Europe stalemates and Middle East unrest reinforce gold's safe-haven status. A softer dollar on easing expectations adds tailwinds, with markets pricing two Fed cuts by the end of 2026 despite the January hold.

“Gold extended its rally on Tuesday, as escalating geopolitical tensions and a softer dollar reinforced demand for safe-haven assets,” said Li Xing, Financial Markets Strategist at Exness. “Geopolitical risks have intensified across multiple fronts. Tensions between the United States and Venezuela escalated further, following two tanker seizures this month. In Asia, frictions between China and Japan remain elevated. Meanwhile, risks in Eastern Europe continue to rise, eroding hopes for a near-term ceasefire, while instability in the Middle East persists.”

US GDP data today could sway rate views, with softening signals likely boosting gold further.

December price movement snapshot

Prices built methodically through the month. On December 1, 24-karat traded at Dh511.75 with 22-karat at Dh473.75. Levels stabilised around Dh506-Dh507 early on, then pushed into the Dh518 range by mid-month. Gains accelerated from December 16, when they reached Dh519.75 and Dh481.25, to Dh533 and Dh493.75 by December 22, before Tuesday's record. Wednesday held firm near those peaks.

ETF inflows and central banks anchor demand

Gold-backed ETFs added 3.1 tonnes net last week, ending December 19, with US funds gaining 9 tonnes despite European outflows of 6.4 tonnes. Holdings rose every month this year except May, per World Gold Council data. The 70% yearly surge reflects central bank buys and debasement fears over ballooning debt.

President Donald Trump's trade push and Fed threats fueled earlier momentum. Bullion rebounded from October's $4,381 peak seen as overheated. Goldman Sachs targets $4,900 base case for 2026, with upside risks.

Silver and platinum outpace due to the supply crunch

Silver jumped 1.8% to $72.70 on Tuesday after a 150% yearly run, hit by speculation and Shanghai volumes echoing October's squeeze. London vaults are filled, but New York holds stock amid US tariff probes.

Platinum surged 4% past $2,300, its longest streak since 2017 and a 160% yearly gain. South Africa's disruptions and high borrowing costs are driving deficits, with banks shifting metal stateside amid tariff fears.

Gold's structural bid from institutions overshadows retail pauses, setting elevated ranges into next year amid persisting risks.

- With inputs from Bloomberg.