On Wednesday morning, gold prices experienced a significant uptick in the UAE, primarily due to the escalating military conflict in the Middle East.
Data from the Dubai Jewellery Group indicated that 24K gold was trading at Dh234.75 per gram at the market’s opening, compared to the previous night’s close of Dh233.5 per gram.
Other gold variants, including 22K, 21K, and 18K, also opened higher at Dh217.25, Dh210.5, and Dh180.25 per gram, respectively.
Global Impact of Conflict:
The deadly blasts in Gaza on Tuesday have raised worries among global investors about the potential for further escalation of conflict in the Middle East.
This uncertainty has driven investors to seek refuge in safe-haven assets like gold.
Analyst’s Perspective:
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, emphasized that despite the severity of the situation in the Middle East, the market’s perception of news will gradually stabilize over time.
As this happens, risk assets like gold and the Swiss franc are expected to retrace some of their gains.
However, she cautioned that it’s too early to lower one’s guard, as Israel’s response and the potential for an offensive remain significant uncertainties.
Diplomatic efforts will play a crucial role in determining the direction of the situation.
Safe-Haven Flows Support Gold:
Gold prices continue to benefit from safe-haven flows driven by geopolitical tensions in the Middle East.
While the risk of further escalation in the conflict remains a supportive factor for gold prices, analysts note that the $1,945 level could be a critical resistance to overcome.
Yeap Jun Rong, a market strategist at IG, highlighted the significance of this level in determining the future price movements of gold.
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