UAE: Gold prices continue to rise; 22K reaches Dh306.5 per gram

Spot gold was trading at $2,739.9 per ounce at 6pm, up by 0.68 per cent

Waheed Abbas

Published: Mon 21 Oct 2024, 6:29 PM

Last updated: Mon 21 Oct 2024, 7:17 PM

Gold prices in the UAE continued their upward trend on Monday, rising by Dh1.5 per gram.

At 6pm UAE time, the 24K variant of the yellow metal rose to Dh331.0 per gram, up from Dh329.5 per gram at the close of the markets last week. Among the other variants, 22K, 21K, and 18K rose to Dh306.5, Dh296.75, and Dh254.5 per gram, respectively.

Spot gold was trading at $2,739.9 per ounce at 6pm, up by 0.68 per cent.

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Gold surged for the fifth consecutive day, reaching a new record high, supported by easing monetary policies from major central banks and geopolitical tension in the Middle East.

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On Monday, the People’s Bank of China (PBoC) cut its key interest rates as part of its stimulus efforts, following the European Central Bank’s (ECB) rate cut.

Vijay Valecha, chief investment officer, Century Financial, said this latest surge in precious metal prices was driven by a wave of traders seeking safe-haven assets following Israel's announcement of the death of Hamas leader Yahya Sinwar.

“Geopolitical tensions escalated further on Monday, pushing gold higher as reports surfaced of Israel preparing imminent attacks on financial sites linked to Lebanon’s Hezbollah. Additionally, traders are adjusting their portfolios ahead of the November 5 US election, which polls indicate could be one of the closest in decades between Donald Trump and Kamala Harris,” he said.

Valecha elaborated that while Chinese investors have stepped back from gold due to the People's Bank of China's stimulus measures aimed at supporting equity markets, Western investor activity has picked up.

“Offshore gold ETFs saw inflows of $1.8 billion last week, and foreign gold mining ETFs attracted $208 million, a notable reversal from earlier outflows this year. Moreover, investors are pricing in a 90 per cent probability of a rate cut in November, further supporting gold’s rally,” he added.

Tito Iakopa, commercial director at FlowCommunity, said ongoing geopolitical tensions, particularly in the Middle East, support gold’s appeal as a safe-haven asset, with no resolution to the conflict in sight.

“Additionally, uncertainty around the upcoming US presidential elections, especially regarding former US president Donald Trump’s potential return and his controversial economic policies, adds to market volatility. As investors navigate these uncertainties, gold remains a key hedge against those risks,” added Iakopa.

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