Dubai: Gold prices hit another record high, head for fourth weekly gain

Gold prices climbed on Friday to hit a historic peak as central bank purchases amid geopolitical tensions sustained the momentum for the yellow metal, while strong US economic data failed to dampen bullion's allure.

In Dubai, 24K traded at Dh288.75 per gram around noontime. Other variants 22K, 21K, and 18K were at Dh267.25, Dh258.75, and Dh221.75, respectively.

Spot gold was up 0.5 per cent at $2,384.34 per ounce in the morning. Bullion hit a record high 2,395.29 earlier in the session, while US gold futures gained 1.2 per cent to $2,401.80.

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"One thing that is definitely fulfilling this gold buy from central banks are the wars happening around the globe, if we look through the history, this always happened as gold is a safe haven," ACY Securities analyst Luca Santos said.

Despite recent hot inflation data and a strong US jobs report last week stirring more questions on the feasibility of rate cuts this year, bullion is poised for a fourth straight weekly rise and has gained over 15 per cent so far for the year.

"We expect gold prices to rise in the next two months. From a technical perspective, this rally is a result of gold prices breaking out of a record 42-month consolidation period. It's like a coiled spring being let loose now," said Vincent Tie, sales manager at dealer Silver Bullion.

Higher interest rates reduce the appeal of holding non-yielding gold.

Elsewhere, the European Central Bank held interest rates at a record high but signalled it could start cutting as soon as June.

Spot silver rose 1 per cent to $28.75 per ounce, hitting its highest levels since Feb 2021.

"As with past precious metal price rallies, silver will outperform gold once it breaks out. We are already seeing customers privy to this behaviour positing themselves in silver in past months," said Tie.

Platinum rose 0.7 per cent to $986.65 and palladium edged 0.1 per cent higher to $1,049.83. All three were on track for a weekly gain.

(With inputs from Reuters)

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