In Dubai, gold prices witness a decline from their record-breaking peak during initial trading.
In Dubai, the price of gold opened lower on Wednesday, following an all-time high the previous day. The price of 22K gold opened at Dh410.75 per gram, a decrease from the record high of Dh445.25 per gram set at the close of the markets on Tuesday. Similarly, 21K and 18K gold also opened lower, at Dh393.75 and Dh337.75 per gram, respectively.
However, the global gold market continues to shine, with spot gold crossing the $3,700 per ounce mark for the first time ever on Tuesday. This milestone was reached amidst ongoing geopolitical tensions in the Middle East and Eastern Europe, which have provided further tailwinds for gold prices.
The increase in gold prices is attributed to monetary easing expectations and increasing safe-haven flows. Gold analyst Nicole Elliott predicted before the Federal Reserve's September meeting that the "golden currency" would benefit if there is a possible interest rate cut. Her prediction seems to be coming true, as global investors are increasing their gold positions ahead of the meeting on September 18.
The rally in gold prices has also been boosted by ETF demand. Eric Chia, financial markets strategist at Exness, stated that ETF demand added to the rally momentum. Last week, gold holdings in ETFs increased by 15 tons, a significant increase compared to previous weeks. However, inflows to gold ETFs slowed down relative to the two previous weeks.
Despite the decrease in Dubai, gold prices have reached a new historical high around $3,700 per ounce, according to market analyst Linh Tran at xs.com. This defensive positioning in gold is reinforced by the ongoing conflicts in the Middle East and Eastern Europe.
Commodity analysts project a healthy correction in gold before it recovers again to reach $4,000 per ounce in 2026. Waheed Abbas, Assistant Editor, frequently reports on business stories that directly affect UAE consumers, including the latest developments in the gold market. He also covers human interest stories.
In a related development, a US appeals court blocked President Donald Trump's attempt to dismiss Governor Lisa Cook. The court's decision comes amidst a series of legal battles over the Federal Reserve's independence and its role in monetary policy decisions, which could potentially impact gold prices in the future.
