Gold prices in Dubai surged to a new all-time high on Wednesday, climbing Dh2.75 per gram at the market's opening. By 9 am UAE time, the 24K variant of the precious metal reached Dh322 per gram in Dubai, marking an increase from Dh319.25 per gram at Tuesday's market close. This surpasses the previous record high of Dh319.5 per gram set on Tuesday. So far this month, gold has appreciated by nearly Dh22 per gram.
Among other variants, 22K, 21K, and 18K were also trading at all-time highs of Dh298.0, Dh288.5, and Dh247.25 per gram, respectively. Globally, spot gold was trading at $2,659 per gram. The surge in gold prices has been fueled by the US Federal Reserve's interest rate cuts and heightened geopolitical tensions in the Middle East.
Analysts anticipate the upward trend in gold prices to persist in the coming months, driven by a resurgence in inflows to exchange-traded funds and expectations of further interest rate cuts by the Fed. Bas Kooijman, CEO and asset manager of DHF Capital, noted that while gold might face some profit-taking in the short term, the long-term outlook remains positive.
Kooijman explained, "The recent surge in gold prices has been influenced by favorable market conditions, including dovish comments from several Federal Reserve members and the Fed's first rate cut last week. Anticipation of additional interest rate cuts in the coming months could create a conducive environment for gold to continue its upward trajectory." He also highlighted that geopolitical tensions in the Middle East are expected to remain high, which could further bolster gold's upward trend as demand for safe-haven assets grows.
Investor demand for gold remains robust, as evidenced by consistent inflows into gold ETFs. Additionally, central banks in emerging economies are showing a strong appetite for gold, likely providing support for prices in the medium term, according to Kooijman.
