Gold prices in Dubai continued their upward trend for the second consecutive day on Tuesday, with a modest increase of half a dirham per gram.
According to data from the Dubai Jewellery Group, 24K gold was trading at Dh322 per gram at 9am UAE time, marking a rise from Dh321.50 at Monday's market close. The other gold variants, including 22K, 21K, and 18K, also saw higher trading prices at Dh298.25, Dh288.75, and Dh247.50 per gram, respectively.
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Spot gold prices stood at $2,642.49 per ounce, down by 0.26 percent. The yellow metal had briefly surpassed $2,650 per ounce on Monday but later trended downwards.
Rania Gule, a senior market analyst at XS.com, attributed the significant rise in gold prices to the geopolitical tensions in the Taiwan Strait. China's recent military drills in the area have heightened international concerns, prompting investors to turn to gold as a safe haven.
"The tension between China and Taiwan is a major factor driving the current demand for gold, especially as tensions in the Middle East continue to escalate. Historically, gold tends to gain strength during geopolitical crises, serving as a refuge for investors in times of uncertainty and risk," she explained.
Furthermore, the recent fiscal stimulus announced by China has provided additional support to gold prices. "China is the largest market for gold, and any measures to support its economy directly impact global gold demand. Over the weekend, China's finance minister unveiled a broad stimulus package aimed at addressing local government debt and supporting the slowing economy. This could lead to increased demand for gold in China, potentially pushing prices to new highs if the stimulus continues to affect the Chinese economy in the medium term," Gule noted.
Gule anticipates that gold will approach a key resistance level between $2,660 and $2,670. "I believe gold will continue to rise as global tensions persist. The economic policies adopted in China will be crucial in determining the strength of gold demand in the global market. While short-term fluctuations in gold prices are possible, the overall trend suggests further gains if current conditions persist," she added.
Waheed Abbas, Assistant Editor, covers real estate, aviation, and other business stories that directly impact UAE consumers. He also frequently reports on human interest stories.
