Dubai: Gold’s winning streak continued on Tuesday as safe-haven demand further increased on global tensions.
The price of 24K gold in Dubai climbed higher to hit Dh161.75 per gram, and fresh buyers in the UAE have found themselves spending nearly Dh23 more per gram than they would have in the beginning of the year.
However, despite the soaring prices, merchants in the UAE maintained that local demand hasn’t so far deterred jewellery fans from hitting the shops. Analysts are banking on the precious metal to gain more support, hence expect no immediate respite from high prices.
After breaking the $1,300 level on August 28, the bullion strengthened further, with spot gold rising by 0.1 per cent at $1,335.36 per ounce as of 0700 GMT, according to Reuters.
“[The] current situation looks set for gold prices to increase with the uncertainty over North Korean missile tests driving the appeal of gold as a safe haven for investors,” Karim Merchant, managing director and CEO of Pure Gold Jewellers, told Gulf News.
Merchant said their shops have not experienced any slowdown in retail gold jewellery buying despite the price rally.
“Customers are using the volatility to their advantage. Gold’s status as a safe haven still holds and it is always a good time to buy [it],” he added.
Ole Hansen of Saxo Bank said that tensions sparked by the recent North Korean nuclear test has made the precious metal even more attractive to investors.
“So far this Monday, it has reached an 11-month high, thereby trading above the spike from the night of the US election back in November,” said Hansen.
“Gold’s break above $1,300 per ounce triggered fresh buying with the net-long rising 18 per cent to 232,000 lots, the highest since September 2016. The ratio between long and short positions has jumped from 1 to almost 19 in the past few weeks.”
“This, the highest ratio since December 2012, could become an issue should gold break back below $1,300 per ounce but for now it mainly demonstrates the extent to which the market continues to turn bullish.”
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