Gold prices increased by over Dh1 per gram at the start of trading in Dubai on Thursday. In the UAE, the price of 24K gold stood at Dh298.5 per gram at 9am on Thursday, up from Dh297.25 at the close on Wednesday. The value of this precious metal reached an all-time high on Wednesday evening, peaking at Dh300.50 per gram before settling at Dh297.25 per gram by the end of the day.
Other forms of gold, including 22K, 21K, and 18K, were priced at Dh276.25, Dh267.50, and Dh229.25 per gram, respectively. Internationally, spot gold traded at $2,467.04 per ounce, marking a 0.23% increase. Prices had previously reached $2,482 per ounce in earlier trading sessions.
The surge in gold prices is largely attributed to expectations that the US Federal Reserve will reduce interest rates in September following recent inflation data. Edward Bell, head of market economics at Emirates NBD Research, noted that gold prices have risen by $140/troy oz or approximately 6% in July due to heightened rate cut expectations. However, the majority of the year's gains occurred in the first quarter and early second quarter when rate cut expectations were decreasing.
Bell further explained that medium- and long-term factors such as consumer sentiment, equity market performance, and the US dollar have a significant impact on gold prices. Gold, being a near-ultimate sentiment investment, tends to benefit during periods of declining consumer and investor optimism. This was notably observed during the global financial crisis and the pandemic, as indicated by the University of Michigan’s consumer sentiment survey.
