Dubai: Gold prices inch slightly higher as markets open

[Editor's Note: Find out the latest gold rate in Dubai here.]

Gold prices inched slightly higher on Wednesday after a weekend of sharp price rise. When markets opened, 24K gold price stood at Dh521.75, up from Dh516.75 on Tuesday.

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Meanwhile, the rates of 22K, 21K,18K, and 14K stood at Dh483, Dh463.25, Dh397 and Dh309.75 respectively. Spot gold prices stood at $4337.96 at 10am, rising 0.84 per cent. The price of silver also rose 4.46 per cent to $66.28. 

According to Walid Koudmani Market Analyst at Naga, gold is likely to remain well supported as expectations for further Fed rate cuts remain high. “This week’s upcoming data could play a pivotal role in shaping future monetary policy expectations,” he said. “A combination of stable inflation and weakening labour conditions could raise expectations of lower rates, bolstering bullion. Furthermore, this week’s Bank of England rate decision could further enhance gold’s appeal as markets expect a 25-basis point rate cut.”

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Last week, the US Federal Reserve decided to cut interest rates by 25 basis point to a range of 3.5 to 3.75. The rate cut and a more “dovish-than-expected tone” from Chair Jerome Powell have weakened the dollar — a fact that is supportive for gold.

Walid added that ongoing geopolitical uncertainty adds to risk aversion and demand for gold. “Additionally, lingering concerns over the Fed’s leadership transition could continue to underpin safe-haven demand,” he said. “Beyond monetary policy, persistent geopolitical tensions, from Eastern Europe and the Middle East to rising frictions in Asia, continue to drive gold’s demand up. Consistent central bank buying and steady ETF inflows suggest demand is consistent, reinforcing the metal’s upside potential.”

He predicted that the broader outlook for gold remains constructive, driven by structural forces. “Markets increasingly expect a lower interest-rate environment and a growth slowdown,” he said. “At the same time, central banks are likely to continue diversifying reserves away from the dollar. While the path might not be linear, the macro-outlook suggests gold prices could trend meaningfully higher over the medium term."

Nasreen Abdulla

nasreen@khaleejtimes.com

Nasreen Abdulla is a Special Correspondent covering food, tech and human interest stories. When not challenged by deadlines, you’ll find her pulling off submissions on the jiu jitsu mats.