UAE: Gold prices jump to an all-time high at the start of the week

Rates of the precious metal have risen over Dh18 per gram in May

by

Waheed Abbas

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Shopper looks on the display of gold ornaments at a jewellery shop in Deira Gold Souq. KT Photo: Shihab
Shopper looks on the display of gold ornaments at a jewellery shop in Deira Gold Souq. KT Photo: Shihab

Published: Mon 20 May 2024, 9:41 AM

Last updated: Fri 24 May 2024, 10:00 AM

Gold prices hit a record high on Monday morning in the UAE due to global rates jumping on the expectations of slowing US inflation.

In the UAE, the 24K variant of the yellow metal rose Dh2.5 per gram to Dh295.0 per gram at the opening of the markets on Monday as compared to last week’s close of Dh292.5 per gram. While 22K, 21K and 18K variants were trading at Dh273.25, Dh264.5 and Dh226.75 per gram, respectively.


The gold prices have risen by over Dh18 per gram since the start of this year. Spot gold was trading at $2,438.29 per ounce, up 0.74 per cent, at 9.05 am UAE time.

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Last week, the US inflation data brought much-needed good news for US consumers and the US economy as it showed that inflation reading is perhaps once again back on the right track.

“For the past few months, we have seen the inflation number start to move in the wrong direction, and that is moving higher after a strong decline. The move made many traders and investors worried, as did the Fed. The question that came to many investors’ minds was: why does inflation begin to move in the wrong direction, and what would that mean for the Fed’s monetary policy, which underpins the price action for the yellow metal because of the movement in the dollar index?" said Naeem Aslam, chief investment officer, Zaye Capital Markets.

He said Russian President Vladimir Putin's visit to China marked another important event recently, as the two countries were actually looking to trade in their own currencies, and this very factor made gold even more important.

“When a country seeks to transition from the dollar-denominated system, it is crucial to have gold reserves to support its currency, with China and Russia playing a significant role in gold demand. They must increase their gold reserves to maintain the value of their currency, even as they include other soft commodities in their mixed basket to demonstrate their ability to trade and trust each other's currencies. In the event of a currency crisis, the inclusion of gold in the basket will provide stability and value to the currency,” he said.

Importantly, India has already begun trading in its own currency with Russia for oil, and discussions are well underway for the UAE to engage in currency exchanges with China, India, and Russia.

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