Gold prices jump to all-time high, gain Dh5 per gram in early trade
Gold prices in Dubai reached unprecedented levels on Thursday morning, experiencing a significant increase of Dh5 per gram at the opening of the markets. This surge comes in the wake of the US Federal Reserve's decision to maintain its projections of three rate cuts for the year, causing a drop in the US dollar and propelling gold to new heights.
According to data from the Dubai Jewellery Group, the 24K variant of gold traded at Dh266.75 per gram at the start of Thursday's trading session, up from Dh261.75 at the previous day's market close, marking a notable increase of Dh5 per gram.
Among other variants of the precious metal, 22K gold opened higher at Dh247 per gram, 21K at Dh239, and 18K at Dh205.
Globally, spot gold reached $2,202.71 per ounce at 9:30 am UAE time, hitting an all-time high of $2,222.39 per ounce earlier in the day. This surge in gold prices follows the Federal Reserve's decision to maintain its projections of three rate cuts for the year, leading to a decline in the US dollar's value.
The Federal Reserve's announcement had an immediate impact on gold prices, with spot gold experiencing a significant increase of over $50 per ounce within the past 24 hours, compared to just above $2,150 per ounce on Wednesday morning.
Late on Wednesday, the Federal Reserve opted to keep interest rates unchanged but indicated its intention to reduce them by three-quarters of a percentage point throughout the year.
In line with the Federal Reserve's decision, the Central Bank of the UAE (CBUAE) chose to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 5.4 percent. This decision was made following the Federal Reserve's announcement on March 20 to leave the Interest on Reserve Balances (IORB) unchanged.
Additionally, the CBUAE decided to retain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.
The surge in gold prices reflects investors' response to the Federal Reserve's decision and its implications for the global economy. Gold, often viewed as a safe-haven asset, tends to appreciate during times of economic uncertainty or when central banks signal accommodative monetary policies.
The rise in gold prices in Dubai underscores the metal's status as a preferred investment option for individuals seeking to hedge against inflation and economic instability. As geopolitical tensions and economic uncertainties persist, gold continues to attract investors seeking to diversify their portfolios and safeguard their wealth.
In conclusion, the surge in gold prices in Dubai highlights the metal's role as a barometer of global economic sentiment. The Federal Reserve's decision to maintain its dovish stance on interest rates has propelled gold to record highs, signaling heightened investor interest in safe-haven assets amidst ongoing uncertainties in the financial markets.
By: Sahiba Suri
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