UAE: Gold prices inch up in early trade as Middle East conflict heightens

The yellow metal market has been on a tear, surging by around $160 during the past two weeks, say experts

Waheed Abbas

Published: Tue 24 Oct 2023, 9:48 AM

Gold prices inched up in the UAE at the opening of the markets on Tuesday, according to Dubai Jewellery Group data.

As of 9 am local time, 24K was trading at Dh239.25 per gram as compared to last night’s close of Dh239.0 per gram. While 22K, 21K and 18K were trading at Dh221.5, Dh214.5 and Dh184.0 per gram, respectively.

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Globally, spot gold was up 0.13 per cent at $1,976.27 as of 9.30 UAE time as investors awaited economic data for guidance on interest rates and monitored growing tensions in the Middle East.

Ole Hansen, head of commodity strategy at Saxo Bank, said while the response in the energy market to the Israel-Hamas war so far has been muted given the difficulty in pricing the risk of an actual supply disruption, the gold market has been on a tear, surging by around $160 during the past two weeks.

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“This highlights a market where traders and investors are growing increasingly concerned, not only about the geopolitical landscape, but also about US fiscal policy, and whether the recent jump in both real and nominal yields will break ‘something',” he said.

Gold’s 160-dollar rally during the past two weeks has seen it slice through several resistance levels, and in the process reached a 13-week high within striking distance of the psychologically important $2,000 level.

Hansen added that spot gold only paused for a short while at resistance around $1,946 before shooting higher towards an even stronger resistance around $1,985.

“Failure to trigger a long overdue consolidation and correction back down towards $1,946 could see prices move higher to eventually challenge resistance around $2,075, the nominal record high from 2020. At this point, a correction is likely to be met with fresh buying demand ahead of $1,950 and especially the 200-day moving average, last at $1,930,” said Saxo Bank’s head of commodity strategy.

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