Gold prices in Dubai climbed sharply at the start of the week, reaching their highest level in more than four months as global investors bet on potential interest rate cuts by the US Federal Reserve.
According to Dubai Jewellery Group data, 24K gold opened on Monday at Dh418.75 per gram, up nearly Dh3 from Dh415.50 over the weekend. The price is now edging close to its record of Dh420 per gram set earlier this year. In international markets, spot gold was trading at $3,477.08 per ounce, an increase of 0.84 percent, having briefly touched an all-time high of $3,500 earlier in 2024.
Market analysts say expectations of looser monetary policy in the US, combined with geopolitical tensions and shifts in global reserves management, are driving demand for the precious metal.
“Gold is back above $3,400 after strong buying momentum late last week,” said Alex Kuptsikevich, chief market analyst at FxPro. He explained that prices have been fluctuating within a trading range since April, with the upper boundary near $3,430. “The Federal Reserve’s signals of possible rate cuts, mounting pressure from the White House, and persistent geopolitical risks have supported the metal at these levels,” he added.
The recent escalation in global trade frictions is also playing a role. Washington’s move to impose 50 percent tariffs on imports from India has raised concerns of widening economic divides between major economies, prompting central banks to diversify their reserves. Many have shifted away from US Treasuries toward gold, accelerating the trend of de-dollarisation.
For the first time since 1996, central banks now hold more gold—about 25 percent—than US government bonds, which account for around 20 percent of their combined foreign exchange and gold reserves. This structural shift is seen as a major factor underpinning the strength in bullion markets.
Kuptsikevich noted that falling yields on US two-year and ten-year Treasury bonds are further bolstering gold’s appeal. “The market is presenting a stagflationary backdrop, and historically, that has been fertile ground for gold bulls,” he said.
Analysts expect volatility to persist in the coming weeks as investors await clearer signals from the Federal Reserve on its interest rate path. With gold already hovering near historic highs, any confirmation of monetary easing could push prices to fresh records, both globally and in Dubai’s retail market.
