Dubai: Gold prices jump in early trade, seen going up further amid tension in region

Besides the high demand for safe-haven assets at this time, Fed officials' neutral interest rate statements may keep gold on an upward trajectory, says analysts

Waheed Abbas

Published: Thu 12 Oct 2023, 10:06 AM

Last updated: Thu 12 Oct 2023, 3:06 PM

Gold prices in the UAE jumped at the opening of the markets on Thursday and analysts expect it to rise further in the coming days due to geopolitical tension in the Middle East and Fed's statements about interest rates staying neutral.

The Dubai Jewellery Group data showed 24K opening at Dh227.50 per gram at 9am on Thursday, as compared to Dh226.75 at the close of the markets on Wednesday.

The 22K, 21K and 18K variants were also trading higher at Dh210.75, Dh204 and Dh174.75 per gram, respectively.

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Spot gold rose 0.2 per cent to $1,879.52 per ounce by 9.25am UAE time, as US dollar and Treasury yields stumbled on the Federal Reserve's cautious approach on interest rates, while investors awaited a key inflation report for more clarity on future policy path.

Rania Gule, market analyst at XS.com, said the yellow metal continued to rise as Fed officials continue to favour keeping interest rates steady in the 5.25 to 5.50 per cent range until the end of the year.

“Gold also benefits from the escalating conflict in Palestine. Investors should be prepared for fluctuations in the price of gold in the near and distant future, as the minutes of the September Federal Open Market Committee (FOMC) meeting and inflation data for the same month are set to be released,” said Gule.

“I believe that gold prices may remain high for some time amid the conflict in Palestine. The appeal of gold as a haven remains high amid risk aversion, increasing demand for safe-haven assets. In addition to the high demand for safe-haven assets, the Fed officials' neutral interest rate statements may keep gold on an upward trajectory,” added Gule.

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