Gold prices in Dubai hit a new record high on Tuesday afternoon, surpassing Dh305 per gram. According to Dubai Jewellery Group data, the 24K variant jumped Dh3 per gram to Dh305.75 per gram on Tuesday afternoon, reaching an all-time high for the precious metal. Similarly, other variants such as 22K, 21K, and 18K also reached all-time highs, selling at Dh283.25, Dh274.0, and Dh235.0 per gram, respectively. Globally, spot gold was trading at $2,525.01 per ounce, up 0.86%, driven higher by US Federal Reserve rate cut expectations. This surge in gold prices has been attributed to various economic and geopolitical factors.
Mohamed Hashad, chief market strategist at Noor Capital, noted a notable rebound in equity markets over the past week, with key factors such as moderation in inflation and resilient economic performance in the US contributing to gold’s surge. Recent data suggesting a potential slowdown in inflation may pave the way for a more accommodative monetary policy by the Fed, further impacting gold prices. The upcoming Jackson Hole economic symposium, where Fed Chair Jerome Powell will deliver a speech, is expected to provide crucial insights into the central bank’s future monetary policy direction, potentially affecting gold prices. Investors are closely monitoring these events for clues on market trends.
Chris Weston, head of research at Pepperstone, believes that Fed Chair Jerome Powell’s speech at Jackson Hole could potentially impact US rates and drive the price of gold. However, Weston’s base case scenario suggests that Powell’s tone may align with market expectations, potentially reducing the shock factor on US swaps and Treasury markets. Investors positioned in gold based on speculation regarding a 50bp rate cut may reconsider their positions based on Powell’s speech. The uncertain market conditions and potential rate changes could continue to impact gold prices.
As gold prices continue to soar, investors are seeking opportunities for returns and protection in this uncertain economic environment. The performance of gold has further highlighted its status as a sought-after asset for investors in times of economic volatility. The confluence of economic and geopolitical events has created favorable conditions for gold as an investment choice. With the ongoing global economic challenges and market uncertainties, gold remains a valuable asset for investors looking to hedge against risks and capitalize on potential returns in the precious metals market.
The surge in gold prices in Dubai and globally reflects the ongoing impact of economic indicators and central bank policies on the precious metal market. Investors are closely monitoring key events such as the Jackson Hole economic symposium and Federal Reserve statements for insights into the future trends of gold prices. The performance of gold in recent weeks has been driven by a combination of economic factors and market uncertainties, highlighting the metal’s role as a safe haven asset for investors seeking stability and potential returns in volatile times. As the market continues to react to changing economic conditions, gold prices are expected to remain influenced by a range of factors that shape the global financial landscape.
