DUBAI, UAE – The precious metals market saw a significant spike on Friday as gold prices in Dubai climbed by more than Dh6 per gram. The surge comes as a weakening US dollar and intensifying geopolitical tensions in the Middle East drive investors toward traditional safe-haven assets.
Market Breakdown: Dubai Gold Rates
At the opening of the markets on Friday, 24K gold was trading at Dh535.5 per gram, a notable jump from Thursday's closing price of Dh529.25. Other variants followed suit, reflecting the broad upward trend:
- 22K: Dh495.75 per gram
- 21K: Dh475.25 per gram
- 18K: Dh407.50 per gram
- 14K: Dh317.75 per gram
On the global stage, spot gold rose 1.4%, trading at $4,445 per ounce. Silver also saw a robust gain, climbing 2.7% to reach $69.69 per ounce.
Drivers of the Price Hike
Market analysts attribute the current volatility to a "perfect storm" of economic and geopolitical factors.
1. The Geopolitical Risk Premium
The primary catalyst remains the protracted conflict in the Middle East. While a 15-point ceasefire proposal initially offered a glimmer of hope, subsequent military movements have renewed fears of escalation. Specifically, the Pentagon’s deployment of 2,000 additional troops to the region has kept the geopolitical risk premium high.
2. Economic Indicators
Beyond the conflict, broader economic shifts are playing a role. Aaron Hill, Chief Market Analyst at FP Markets, noted that gold is benefiting from easing inflation expectations—a trend supported by falling oil prices. When the US dollar weakens, gold typically becomes more attractive to international buyers.
Expert Outlook: A Vulnerable Rally?
Despite the gains, some experts warn that the rally may face headwinds. Samer Hasn, Senior Market Analyst at xs.com, pointed out that the complexity of the Middle East conflict has occasionally muffled gold's ability to fully capitalize on its safe-haven status.
"A decrease in speculative investment positions in Comex gold futures has made the metal more vulnerable to price declines," Hasn noted.
Furthermore, mixed signals regarding the potential for de-escalation with Iran continue to keep traders on edge. While diplomatic efforts remain on the table, the underlying military posturing suggests that volatility will remain a staple of the Dubai gold market for the foreseeable future.
Source: Khaleej Times
