Gold prices remained close to record highs on Friday, supported by the US Federal Reserve's recent significant interest rate cut and indications of further reductions to come. In Dubai, the 24K variant of gold was trading at Dh314 per gram in the morning, while other variants 22K, 21K, and 18K were priced at Dh290.75, Dh281.50, and Dh241.25, respectively.
Spot gold increased by 0.3% to $2,593.79 per ounce as of 0539 GMT, marking a 0.7% rise for the week so far. The precious metal reached a record high of $2,599.92 on Wednesday following the Fed's decision to initiate an easing cycle with a half-percentage-point cut. The central bank also forecasted additional half-point reductions by year-end, a full point next year, and another half-point cut in 2026.
Kyle Rodda, a financial market analyst at Capital.com, commented, "Current trends are very positive for gold, and if these favourable market conditions persist, prices could surge to between $2,600 and $2,800 over the next 12 months." Lower US interest rates and geopolitical uncertainties are boosting gold's appeal.
In the Middle East, tensions escalated as Israeli warplanes conducted their most intense strikes on southern Lebanon in nearly a year, deepening the conflict with Hezbollah. BMI noted in a report, "Gold prices are expected to be well supported in the coming months due to a weaker U.S. dollar, lower bond yields, and heightened geopolitical tensions."
