Gold prices in the UAE have surged to record highs due to strong global safe-haven demand amid rising geopolitical tension. Moreover, the UAE gold rates across all purities have posted sharp gains as the international bullion market rallies. Therefore, it reflects the strength of the ongoing precious metals boom.
Fresh UAE Gold Rates Touch Height
As we told you before, the gold price in the United Arab Emirates (UAE) has surged sharply, as it hit a fresh all-time high because of investors’ attraction to safe-haven assets amid escalating geopolitical and economic uncertainty. 24K gold in the UAE stood at Dh540 when the market opened on Tuesday, December 23. Therefore, it has marked a jump of more than Dh10 from Dh529.75 recorded on Monday morning.
Other gold categories also saw strong gains. 22K gold rose to Dh500, 21K to Dh479.50, 18K to Dh411, and 14K to Dh320.50. Therefore, it reflects a broad-based rally across purity levels. Moreover, these gains reflect the global trend, where spot gold prices surge close to the $4,500 mark.
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Global Gold and Silver Prices at Historic Levels
Spot gold climbed more than 1 per cent throughout the world, as it traded at around $4,482 per ounce after touching an intraday record of nearly $4,498. Moreover, the US gold futures for February delivery also crossed $4,500, which highlights the strong investor momentum.
On the other hand, silver also joined the rally because it hit a new all-time high. Hence, spot silver traded around $69.50. Moreover, analysts pointed to supply shortages, strong industrial demand, and increased investment inflows. Year-to-date, silver has significantly outperformed gold.
Why Are UAE Gold Rates Rising So Fast?
Vijay Valecha, Chief Investment Officer at Century Financial, said in an interaction with Khaleej Times, “This is one of the strongest rallies gold has seen since the 1970s”. He explained that gold traditionally serves as an inflation hedge and a safe haven, but the current gold conditions are pushing investors more strongly toward its safe-haven appeal.
Rising geopolitical tensions, including trade disputes and escalating conflicts involving major economies, have increased risk aversion to global markets. Moreover, expectations of a US interest rate cut, potential changes in Federal Reserve leadership, and ongoing currency volatility have further boosted demand for precious metals.
Gold has already gained more than 70 per cent this year due to central bank purchases, de-dollarisation trends, and renewed inflows into gold-backed exchange-traded funds (ETFs).
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Gold Demand in the UAE: A Unique Market
UAE gold demand differs from many other countries because of its status as a global trading hub. Customers are purchasing it, but they are being cautious due to the increasing gold price.
Valecha noted that the Middle East jewellery demand has reached 33.8 tonnes in Q3. Moreover, the UAE accounts for roughly one-fifth of the regional demand, followed by Saudi Arabia. However, this trend is aligned with the global patterns, as developed markets like the U.S. saw weak jewellery demand during the same period.
On the other side, bar and coin demand in the UAE is also strong, as it stands at around 3.4 tonnes in Q3. In contrast, bar and coin demand in the US fell sharply as investors booked profits. Hence, the UAE continues to benefit from its role in boosting global gold flows.
A significant portion of gold traded in Dubai is exported to South Asia, Africa, and neighbouring regions. Hence, it supports the importance of the country in the global bullion supply chain.
Outlook for UAE Gold Rates
Analysts have alerted that the short-term consolidation might occur during the holiday period due to lower trading volume. However, the broader lower outlook is bullish. Still, the UAE gold prices are expected to stay elevated due to ongoing geopolitical risks and expectations of easier monetary policy.
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