Gold prices in the UAE soared above Dh500 a second straight day, opening slightly above the milestone on Wednesday, after falling short of the mark by the end of the previous day.
It was reported that 24K gold was trading at Dh505.75 per gram on Wednesday evening. That is where gold buyers have witnessed prices soaring far beyond Dh80 per gram within two months.
The gold prices have not only surged in the UAE, but other countries such as Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.
The reason behind the soaring price rates of gold
The reached another record in the world market when it topped the mark of $4,190 an ounce on Wednesday.
Gold is becoming hoarded by traders as concern deepens over U.S.-China trade tensions and the likelihood of additional U.S. interest rate reductions later this year.
The uncertainty has seen investors channel their funds into less risky assets such as gold, which is traditionally viewed as an asset to hedge in times of political or economic turmoil.
The analysts of major global banks are now scrambling to increase their predictions. Bank of America believes that by 2026, the gold would be around $4,400 an ounce, whereas Societe Generale believes that by the end of next year, it will be at $5,000 an ounce.
The rate cuts boost the gold
When the interest rate decreases, cash or bond holdings will not be as rewarding. Therefore, gold, which does not earn interest, all of a sudden looks more attractive. But at the same time, when investors buy gold, simultaneously, there is an increase in prices too.
Money markets are deciding to put a 97 percent probability that the U.S. Federal Reserve will lower rates by 25 basis points when its next meeting comes later this month. This remains one of the largest reasons why gold is skyrocketing in the world.
Political concerns amid skyrocketing prices
The tensions between the U.S. and China are brought into the limelight again. President Donald Trump has recently threatened to impose 100 percent tariffs on Chinese products, but later diluted those claims, saying things would “be fine.”
However, as both nations continue to negotiate trade terms, investors are preparing to expect further friction.
Simultaneously, the U.S. government shutdown, which is entering its second week, has stalled the economic data releases of major importance, which has further creating an element of uncertainty.
When politics, markets, and world confidence collide, gold frequently gains, and this is what is being experienced currently.
Gold price effects on the UAE’s residents
To the UAE shoppers and investors, it has become difficult to determine when to buy gold. The prices have now been on an almost uninterrupted upward trend since September, and with the projections going higher, many are asking whether to buy now or wait until the prices come down.
Jewelry consumers are already experiencing the squeeze, and long-term investors are taking these signs as a reassurance that gold is recovering as a “safe haven” asset.
In case the prices continue to increase similarly, 24K gold may soon reach Dh500 per gram, a psychological price that has not been experienced in years.
The world is providing gold with a very strong push, and the UAE market is experiencing all the push.
It is worth keeping an eye on both international bulletin boards and domestic price boards. Whether planning to purchase jewelry or considering investing in gold, it will only take a few days before you can reach that Dh500 mark at this pace.
