Gold prices edged up as Dubai markets opened for the week, nearing last week’s record high.
Data from the Dubai Jewellery Group shows 24K gold started at Dh439.25 per gram, 22K at Dh406.75, 21K at Dh390, and 18K at Dh334.25.
Spot gold was trading at $3,646.32 per ounce, marking a 0.1% increase by 9:30 am UAE time.
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Last week, the precious metal hit a record high with 22K reaching Dh408 per gram on Tuesday. The market revisited this high on Friday but later pulled back.
The global price rally is fueled by expectations of interest rate cuts by the US Federal Reserve, central bank purchases, and geopolitical tensions. Investors await the US Federal Reserve meeting on Wednesday for hints on future interest rate decisions.
After a strong surge, some analysts predict a potential correction in gold prices.
FxPro’s chief market analyst, Alex Kuptsikevich, noted gold’s strong reaction to geopolitical events, reaching yet another record high, rising for the fourth consecutive week.
“Should Washington pursue economic measures against the Kremlin’s main allies, India and China, with Brussels’ support, central banks might increase gold purchases for reserve diversification and de-dollarization. Geopolitical factors have reduced gold’s sensitivity to the Fed’s policies. Even the strengthening US dollar hasn’t hindered gold’s rise. The White House’s decision to exclude this asset from potential tariffs also hasn’t impacted it,” Kuptsikevich commented.
He suggested that if US President Donald Trump can create a divide between Russia, India, and China, oil prices might rise, accelerating inflation. A stagflationary scenario and increased central bank bullion purchases could bolster gold.
In the short term, he identified technical overbought conditions following the significant rise.
“This was evident in the price stabilization from Tuesday to Thursday, contrasting with the ongoing rise in silver and other precious metals, and new highs in stock indices,” he noted, adding that the anticipated key rate cut on Wednesday could trigger a “buy the rumors, sell the fact” scenario.
