Gold climbs to a seven-week high on weaker dollar

Dubai: Gold prices pushed to a seven-week high on Friday, riding a weaker dollar, rate cut expectations and fresh safe-haven flows amid geopolitical strains. Dubai’s 24-karat gold reached Dh519.75 per gram by mid-afternoon, up from Dh515.75 the previous day, while the 22-karat variant climbed to Dh481.25 from Dh477.50.  (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Spot gold settled 0.7% higher at $4,311.73 per ounce by late morning GMT, its strongest level since October 21 and poised for a 2.7% weekly advance. US gold futures mirrored the move, gaining 0.7% to $4,343.50. The dollar index lingered near a two-month trough, enhancing bullion’s appeal to international buyers.

Dubai’s retail market reflected the broader uptrend, with investors piling into physical gold amid uncertainty. The 24-karat benchmark’s Dh4 jump highlights sustained demand from jewellery buyers and bar hoarders alike, even as premiums remain tight in the emirate’s bustling souks.

Year-to-date, gold has rocketed over 60%, posting its best annual showing since 1979. Silver outpaced it further, more than doubling to touch a record $64.3120 an ounce on Thursday, fueled by supply squeezes and industrial buying.

The US Federal Reserve’s 25 basis-point cut on Wednesday marked its third easing move this year, yet signaled restraint on further reductions. Swap markets now price in two cuts for 2026, with next week’s non-farm payrolls data set to clarify the labor picture after last week’s jobless claims spiked by the most in nearly four and a half years.

A softer interest rate backdrop bolsters non-yielding assets like gold. Lower yields erode the opportunity cost of holding bullion, drawing in central banks and ETFs. World Gold Council data shows gold-backed fund holdings rising every month this year except May, a streak signaling deep investor conviction.

Precious metals continue to outperform amid favorable macro tailwinds. “Gold is back in a solid uptrend after the October correction, supported by lower US yields and a softer dollar,” said Ipek Ozkardeskaya, Senior Analyst at Swissquote. “Silver and copper benefit from the same bullish factors, plus tight supply conditions.”

Ozkardeskaya noted silver’s extra lift from physical shortages and trading disruptions, contrasting with oil’s slump toward $58 per barrel despite earlier Middle East tensions. Ample US, OPEC and non-OPEC supply weighs on crude, even as the dollar weakens below its 100-day moving average.

Geopolitical friction provided the spark, with investors rotating into bullion as a hedge against volatility. Central bank purchases remain a bedrock, alongside ETF inflows and a retreat from bonds amid yield compression. Silver’s industrial demand adds another layer, tightening availability at key hubs.

- With inputs from agencies.