The gold surge in Dubai gained momentum this week, with prices climbing hourly and nearing Dh500 per gram.
On Monday evening, 24K gold increased by Dh9 to Dh493.25 per gram, while 22K rose by Dh8.5 to Dh456.75 per gram. Other variants also saw increases: 21K reached Dh438 and 18K reached Dh375.5 per gram.
If this trend continues, Dubai’s gold prices may exceed Dh500 per gram for the first time.
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Spot gold was close to $4,100 per ounce on Monday evening, trading at $4,097.5 per ounce at 6:45 pm UAE time, driven by US-China trade tensions and expectations of US Federal Reserve interest rate cuts.
Amid global trade and geopolitical tensions, Bank of America raised its forecast for gold to $5,000 per ounce and silver to $65 per ounce on Monday.
“The White House’s unconventional policy approach is likely to support gold due to fiscal deficits, rising debt, and efforts to reduce the current account deficit and capital inflows, alongside a push to cut rates with inflation around three percent,” the American bank stated in a recent note.
“Gold prices have achieved historic highs, surpassing the $4,000 benchmark, marking a significant rise from levels near $2,620 at the start of the year—a more than 54% increase year-to-date. President Donald Trump’s recent comments about reinstating aggressive tariffs on Chinese imports have heightened geopolitical concerns and increased safe-haven demand, but the ongoing gold rally is driven by deeper macroeconomic changes,” explained Mohanad Yakout, senior markets analyst at Scope Markets.
“A key factor,” he noted, “is the growing anticipation of monetary easing by the Federal Reserve in 2025. Although inflation remains slightly high, signs of economic weakening, particularly with recent labor market data, suggest a shift toward rate cuts. Lower interest rates enhance the appeal of non-yielding assets like gold. Additionally, uncertainty over a prolonged US government shutdown undermines confidence in fiscal stability and boosts demand for safe-haven investments,” he said.
Yakout also noted that the global trend toward de-dollarization is speeding up. “Central banks, especially in emerging markets, are increasing their gold reserves to reduce dependence on the US dollar. There have been net positive purchases by central banks in 27 of the last 28 months. This consistent demand from the official sector has bolstered gold’s rise.”
He further pointed out that concerns about currency debasement are resurfacing.
“With high sovereign debt and ongoing fiscal deficits in major economies, investors increasingly view gold as a defense against long-term inflation and the erosion of fiat currency value. All these factors contribute to a broader outlook supporting further gold upside, with Trump’s comments being the icing on the cake,” he concluded.
