Gold prices experience a decrease from their peak in initial trading in Dubai.
Gold prices have reached unprecedented heights, with the precious metal crossing the $3,700 per ounce mark for the first time ever on Tuesday. This historic milestone was driven by a combination of safe haven demand, a weaker dollar, central bank buying, and the Federal Reserve's signaled imminent interest rate cut.
On Wednesday, 24K, 21K, and 18K gold opened lower in Dubai, trading at Dh443.75, Dh393.75, and Dh337.75 per gram, respectively. Meanwhile, 22K gold opened slightly higher at Dh410.75 per gram. The record high for 24K gold was Dh445.25 per gram at the close of the markets on Tuesday.
The surge in gold prices has been bolstered by geopolitical tensions in the Middle East and Eastern Europe, which have reinforced defensive positioning in gold. Eric Chia, financial markets strategist at Exness, states that gold ETF demand has contributed to the gold rally momentum. However, inflows into gold ETFs have slowed down relative to the two previous weeks, according to the same source.
Commodity analysts project a healthy correction in gold before it recovers again to reach $4,000 per ounce in 2026. Linh Tran, market analyst at xs.com, predicts that gold may continue to find support if the US Federal Reserve takes a dovish stance and opens the door to a clear easing cycle.
The Federal Reserve signaled an imminent interest rate cut on Monday, 16th August, to support the economy due to rising inflation and a weakening labor market. This move is expected to influence gold prices by driving them higher as investors seek a portfolio hedge and respond to expectations of monetary easing.
In other news, spot gold was trading at $3,680.57 per ounce on Wednesday morning, down 0.22 per cent. The UN rights chief has condemned an Israeli strike in Doha as an assault on regional stability, while a US appeals court blocked President Donald Trump's attempt to dismiss Governor Lisa Cook, providing support to gold, according to Eric Chia.
In the world of entertainment, Vijay Sethupathi is hosting Bigg Boss Tamil season 9. Waheed Abbas, Assistant Editor, is covering real estate, aviation, and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.
Gold holdings in ETFs increased by 15 tons last week, and the UAE-based association has requested clarity on India's gold carrying rules. Read more about this in our related article titled "UAE-based association asks for clarity on India's gold carrying rules."
As gold prices continue to rise, it remains to be seen how this trend will unfold in the coming weeks and months. Stay tuned for more updates on this developing story.
