Gold prices in the UAE surged as markets opened on Wednesday, driven by the persisting Middle East crisis and the increased demand for safe-haven assets.
Dubai Jewellery Group’s Data:
According to data from the Dubai Jewellery Group, 24K gold was trading at Dh238.75 per gram on Wednesday morning, marking a significant increase from Dh238.0 at the close of markets on Tuesday. Other variants of gold also witnessed higher opening prices.
Variants of Gold Prices:
- 22K gold was trading at Dh221.25 per gram.
- 21K gold was priced at Dh214.0 per gram.
- 18K gold was valued at Dh183.5 per gram at 9 a.m. UAE time on Wednesday.
Global Spot Gold Market:
On the global stage, spot gold gained 0.3 percent, reaching $1,975.61 per ounce. Softer US Treasury yields drove this increase, although the precious metal showed signs of fatigue regarding its safe-haven demand.
Previous Decline and Market Analysis:
Gold had experienced a decline in the two preceding sessions and was trading below the five-month highs achieved the previous week.
Analysts, such as Alex Kuptsikevich, a senior market analyst at FxPro, attributed this decline to profit-taking following a significant rally prompted by the Middle East tensions.
Analyst’s Perspective:
According to Alex Kuptsikevich, gold’s cost per troy ounce had briefly reached $1,955 during the peak of the European session on Tuesday.
This followed a two-week rally, starting from $1,811 and nearly hitting $2,000 since October 6. He noted that this week’s market opening with a gap down signified substantial profit-taking demand, although the gap was closed during the day.
Future Outlook for Gold:
Kuptsikevich suggested a more bullish scenario for gold.
He stated that despite the common belief that rising government bond yields are bearish for gold, it’s unlikely that significant capital would flow into a declining market.
Signs of a bottom forming could trigger a shift in the prevailing trade, leading to a flow of capital out of gold and into bonds.
