The upward trajectory of gold prices persisted in Dubai on the first trading day of the week, soaring to an unprecedented high of Dh313 per gram at the market opening on Monday.
The 24K variant of the precious metal commenced trading at Dh313.0 per gram, marking a Dh0.75 increase per gram compared to the Dh312.25 recorded at the weekend's market close. Among other variants, 22K, 21K, and 18K also opened higher at Dh290.0, Dh280.5, and Dh240.5 per gram, respectively.
Globally, gold was trading at $2,586.23 per ounce, reflecting a 0.28% increase at 9.10 am UAE time. The meteoric rise of gold has reached historic levels, primarily fueled by several factors including anticipated Federal Reserve interest rate cuts, a weakening US dollar, and escalating geopolitical tensions.
Mohamed Hashad, chief market strategist at Noor Capital, noted that gold prices hit another record high as investors grew increasingly optimistic about a future decline in global interest rates. As a traditional safe-haven asset, gold prices typically move inversely to interest rates.
This week's pivotal international economic event is the US Federal Reserve’s policy meeting. “Most traders anticipate that the Fed will proceed cautiously when it implements the first rate reduction since the pandemic began, as indicated by the fed funds futures market,” Hashad stated.
He further added, “The expectation of a rate cut has been a major driver for gold prices. As the Federal Reserve hints at a potential easing of monetary policy, investors often seek gold as a safe-haven asset. Lower interest rates generally reduce the opportunity cost of holding gold, which does not yield interest income. Additionally, a rate cut can weaken the US dollar, making gold more appealing to foreign buyers.”
