Gold prices in Dubai trade higher in early trade
Gold prices in Dubai increased during early trading on Thursday, reflecting a broader trend in the precious metals market. The price of gold remained strong, staying above $2,500 per ounce. This uptick highlights ongoing investor interest and market demand for gold, which often serves as a safe-haven asset amid economic uncertainties and fluctuations in other financial markets.
In the UAE, the 24K gold was trading at Dh303.0 per gram at 9 a.m. UAE time, reflecting a rise of Dh0.75 per gram. This increase underscores the growing value of gold in the market, influenced by global trends and investor demand for the precious metal.
Out of the different options, 22K, 21K and 18K started trading at Dh280.5, Dh271.5 and Dh232.75 per gram, respectively.
Globally, the price of spot gold was $2,502.13 per ounce at 9:05 a.m. UAE time, marking a decrease of 0.43%. This slight decline reflects recent market fluctuations and investor sentiment, highlighting the ongoing volatility in gold prices despite their generally high levels.
Senior analyst at Swissquote Bank, Ipek Ozkardeskaya, stated that the dollar's struggles are causing gold to shine brightly.
Recently, gold reached a new all-time high, driven by growing expectations of interest rate reductions by the US Federal Reserve and lower US yields. This surge in gold prices reflects increased investor interest amid economic uncertainty. According to TD Securities, the current positioning of gold is more aligned with levels typically seen during a recession.
They suggest that if one does not anticipate an imminent recession, the current high gold prices might be considered inflated. This scenario highlights the delicate balance between market expectations and economic indicators influencing the value of the precious metal.
Ozkardeskaya further stated that central banks in emerging markets are purchasing gold as a way to protect against inflation and decrease dependency on the dollar, with the unstable political and financial situation driving investment towards the safety of gold.
He added that Chinese consumers are reducing their purchases because of expensive prices, the dovish Fed expectations seem too high, and the RSI index indicates that gold may soon be overbought, suggesting a correction would be beneficial at current levels.
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