Little relief for Dubai gold buyers as prices hold near all-time highs

Dubai: Gold prices in Dubai ticked higher on Thursday morning, even as the global bullion rally showed signs of catching its breath after hitting fresh records. The 24‑karat category stood at Dh539.75 per gram as of 9:45 am in Dubai, up from Wednesday’s close of Dh537.25, while 22‑karat rose to Dh499.75 compared with Dh497.50 the previous day. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

On international markets, gold was little changed in early trade, with some investors locking in gains after the “ferocious” move in precious metals through December. Platinum dropped more than 6% overnight, retreating from its own record above $2,300 an ounce, but remains more than double its level at the start of the year.

Short‑term technical signals are also flashing a breather. Gold’s 14‑day relative strength index moved into overbought territory on Wednesday, a classic sign that prices may be due for consolidation or a pullback after an extended run.

The latest leg of the rally has been driven by safe‑haven demand and shifting interest‑rate expectations. Escalating tensions in Venezuela, where the US has blockaded oil tankers and stepped up pressure on President Nicolás Maduro’s government, have reinforced gold’s role as a geopolitical hedge.

At the same time, traders expect the US Federal Reserve to cut borrowing costs further next year after a series of reductions in 2025, a backdrop that typically supports non‑yielding assets such as gold and silver. US President Donald Trump’s aggressive trade moves and repeated criticism of the Fed’s independence earlier in the year amplified concerns over policy and currency stability, feeding into the so‑called “debasement trade” as investors rotated out of sovereign bonds and major currencies into hard assets.

Under the surface, structural buying has been as important as short‑term flows. Central banks have stepped up purchases, particularly in emerging markets seeking to diversify reserves away from the dollar, while holdings in gold‑backed exchange‑traded funds have increased every month this year except May, according to World Gold Council data.

Heavy ETF demand has been a major driver of the latest surge. Units in State Street’s SPDR Gold Trust, the world’s largest bullion ETF, have risen by more than a fifth this year, reinforcing the metal’s appeal as both a portfolio hedge and a liquid investment vehicle.

After briefly stalling at more than $4,500, gold has already demonstrated its resilience once this year, rebounding quickly from an October correction when the rally was widely described as overheated at the previous peak of $4,381 an ounce.

Looking ahead, major banks still see scope for further gains, albeit at a slower pace. Goldman Sachs has issued a base‑case forecast of $4,900 an ounce for 2026, with risks skewed to the upside if geopolitical stress, fiscal worries or renewed dollar weakness intensify.

- With inputs from Bloomberg.