Gold prices in Dubai reach fresh all-time high, edge closer to Dh560
Gold prices in Dubai rise to new highs as rate-cut bets and global risks fuel demand
Dubai: Gold prices in Dubai climbed to a fresh all-time high on Wednesday morning, extending a rally that has gathered pace since the start of the year as investors seek safety amid geopolitical tension and uncertainty around US monetary policy. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)
The price of 24-karat gold touched Dh558 per gram, up from Dh555.50 on Tuesday. The 22-karat rate followed a similar upward path, surging to Dh516.75 from Dh514.25 a day earlier.
The latest move caps a strong two-week run that has seen gold prices rise steadily since the turn of the year. On January 1, 24-karat gold was priced just above Dh520, before pushing past Dh536 in the first week and accelerating further in recent sessions. Momentum picked up sharply after January 10, when prices broke above Dh543, setting the stage for this week’s record levels.
That trend reflects a combination of global and domestic factors. Globally, gold has been supported by renewed demand for safe-haven assets after rising geopolitical risks and growing concerns around the independence of the US Federal Reserve.
Bloomberg reported that gold was trading within striking distance of record highs globally, while silver surged past $90 an ounce for the first time. Investors have been reassessing risk after political pressure on the Federal Reserve intensified and expectations grew for further US interest rate cuts later this year.
While the Fed is widely expected to keep rates unchanged this month, two rate cuts are still expected later this year, a backdrop that remains supportive for gold.
Markets are now closely watching US inflation data due later on Wednesday, which could influence the Federal Reserve’s next move. Fadi Al Kurdi, founder and CEO of FFA Kings, said the broader macro backdrop remains supportive for gold.
“While the Fed is widely expected to keep rates unchanged this month, two rate cuts are still expected later this year, a backdrop that remains supportive for gold,” he said.
Geopolitical developments have added another layer of support. Tensions in the Middle East have escalated after US President Donald Trump threatened to impose 25% tariffs on countries trading with Iran, while uncertainty continues around Eastern Europe and Greenland. These risks have helped sustain demand for safe-haven assets.
Legal action targeting Fed Chair Jerome Powell raised alarms about political interference in monetary policy. While top Republican lawmakers have since called for a swift resolution to the case, investor sentiment remains cautious. Any perceived erosion of the Federal Reserve's autonomy is likely to fuel safe-haven flows.
Bas Kooijman, CEO and asset manager at DHF Capital, said concerns about political interference in monetary policy are also playing a role.
“Any perceived erosion of the Federal Reserve’s autonomy is likely to fuel safe-haven flows,” he said, adding that heightened geopolitical risks are reinforcing investor caution.
In Dubai, prices have risen almost Dh38 per gram for 24-karat gold since the start of January, making purchases significantly more expensive but strengthening sentiment among investors who already hold the metal.
With inflation data, central bank decisions and geopolitical developments still unfolding, traders expect gold prices to remain sensitive to global headlines in the days ahead.
- With inputs from Bloomberg.
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