Gold prices in the UAE started the week on an upward trend, according to the Dubai Jewellery Group. On Monday, 24K gold opened at Dh296.75 per gram, a slight increase from the previous week's close at Dh296.0 per gram. Other karats, including 22K, 21K, and 18K, traded at Dh274.75, Dh266.0, and Dh228.0 per gram respectively.
Internationally, spot gold prices reached $2,447.51 per ounce, marking a 0.26% increase at 9.16am UAE time. Dilin Wu, a research strategist at Pepperstone, highlighted that the bullish trends in gold are robust and it is anticipated that the market will soon witness a new record high. Wu attributed this to the US Federal Reserve's policy, noting that despite higher-than-expected core PCE in June, the likelihood of a rate cut in September remains high, as indicated by the FOMC meeting and comments from Fed Chair Jerome Powell. Lower interest rates are favorable for gold, which functions as a zero-yield asset, much like a steadfast lighthouse amidst a storm.
Geopolitical tensions, particularly in the Middle East and uncertainties surrounding the US elections, also play a crucial role, according to Wu. He pointed out that with Kamala Harris narrowing the gap with Trump and recent polls showing a decline in Trump's lead in swing states, the dollar is facing pressure. This, coupled with the expectation of a weaker dollar, is boosting the demand for gold as a safe-haven asset, thereby pushing prices higher.
The World Gold Council's report, released on July 30th, indicated that global gold demand in the second quarter and official gold reserves for the first half of the year hit all-time highs, providing a robust foundation for gold prices. Wu concluded that economic and geopolitical instability, along with strong global demand for gold, are likely to maintain high gold prices.
