In Dubai, gold prices surged on Tuesday, climbing over Dh5 per gram to reach a record high as the markets opened.
By 9 am UAE time, 24K gold increased by Dh5.25 per gram, pricing at Dh466 per gram, up from Dh460.75 per gram at Monday’s market close. Similarly, 22K gold rose by Dh4.5 per gram to Dh431.25 per gram. Other variants, such as 21K and 18K gold, opened at Dh413.75 and Dh354.5 per gram, respectively.
Spot gold traded at $3,864.39 per ounce, marking a nearly one percent increase. The precious metal is on track for its best month in 14 years due to concerns over a potential US government shutdown and rising expectations of further US interest rate cuts, which have increased demand for this safe-haven asset.
Market strategist Ahmad Assiri from Pepperstone noted that if Congress does not approve a last-minute funding bill, non-essential government agencies would close, disrupting many public services.
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“Investors aren’t worried about bureaucracy per se, but the lack of official economic data and statistics, which are vital for policymakers and markets. Historically, the US has experienced shutdowns, notably a 16-day shutdown in 2013 due to Affordable Care Act disputes, and a record 35-day shutdown during 2018-2019. While most shutdowns resolve within two weeks, the 2018 scenario showed how extended deadlocks can significantly impact growth, with the Congressional Budget Office estimating GDP losses of about $11 billion,” Assiri explained.
Regarding commodities, Assiri added that gold prices soared to new highs above $3,850 per ounce, driven by both speculative and structural demand.
“Selling gold now is costly, as demand quickly absorbs profit-taking. While short-term fatigue might occur, further gains seem fragile, solidifying gold’s strong position,” Assiri added.
