Dubai Multi Commodities Centre says the value of gold traded in Dubai this year increased over six times since 2001. Image Credit: Pankaj Sharma/XPRESS

Dubai: The gold price in the global market may have eased on Tuesday, but the cost of jewellery at the local souk may remain high for many average-income shoppers in the UAE, the latest data show.

Those buying new jewellery in the UAE today can expect to spend a few dirhams more per gram compared to what they would have spent in March or January.

And it looks like gold fans are in for more price hikes this year, with some analysts predicting that prices could hit their highest level in years, at a whopping $1,400 an ounce, due to fears over a global trade war.

As of 10.40 am, the price of 24-karat gold (24k) stood at Dh162 per gram, up by Dh3 since January 4 and Dh2.50 since early last month. Other pieces, such as 22K, 21K and 18K also now command higher prices at Dh152.25, Dh145.25 and Dh124.50 per gram, respectively.

In the global market, the bullion was trading at $1,338.51 per ounce, down by 0.2 per cent from the previous day. Gold had climbed 1.3 per cent on Monday, the biggest one-day percentage jump in a week, according to a Reuters report.

“Gold prices at this moment serve for investors risk aversion demand and gold for the immediate short term will be well supported because of the volatility in the equity markets,”  Mark To, head of research at Hong Kong’s Wing Fung Financial Group, was quoted in the report.

According to Vijay Valecha, chief market analyst at Century Financial Brokers, the bullion is on track to remain strong this week.

“Gold prices rose sharply yesterday after a very dull week. Gold prices rose till $1,345 from a start of the week of $1,324 levels. The gold prices had dropped last week on the account of a rebound in the dollar prices,” Valecha said.

“Given the sharp rise at the start of the week which has come with the ongoing trade war tensions, gold should continue to remain bullish for the week and probably try to reach the upper end of its range to $1,360 levels.”

Rick Rule, chief executive officer of Sprott US Holdings Inc., said that the precious metal could reach as much as $1,400 an ounce this year due to the ongoing trade tensions between the United States and China.

China had recently announced that it is imposing tariffs on  128 American products, including meat, fruits and steel. This was deemed as China’s response to US President Donald Trump’s decision to tax steel and aluminium imports from China and other countries.

 “In the 40 years I’ve been involved in the gold market, the most important determinant of the gold price has been international confidence in the U.S. dollar and in particular, the U.S. dollar as expressed by the U.S. 10-year Treasury,” Rule told Bloomberg.

“The fact that the U.S. seems to be bound to engage in a zero-sum trade war has begun to strike people as something that’s bad for everybody in the world, not just the U.S. The potential for a winner-less trade war certainly gives cause to some concern.”

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To keep up to date with gold prices, go to our gold rate page.

Currency Rate: To keep up to date with latest exchange rates, go to our currencies page.