UAE: Gold prices rise as Middle East crisis supports precious metal

It declined in the previous two sessions and traded below five-month highs hit last week

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Waheed Abbas

Published: Wed 25 Oct 2023, 9:37 AM

Gold prices jumped in the UAE at the opening of the markets on Wednesday as the Middle East crisis continues to support safe-haven metal.

The Dubai Jewellery Group data showed 24K trading at Dh238.75 per gram on Wednesday morning as against Dh238.0 at the close of the markets on Tuesday. Similarly, the other variants of the yellow metal also opened higher. Data showed 22K trading at Dh221.25, 21K at Dh214.0 and 18K at Dh183.5 per gram at 9 am UAE time on Wednesday.

Spot gold gained 0.3 per cent to $1,975.61 per ounce on softer US Treasury yields, but lacked impetus to rise further as bullion’s safe-haven demand showed signs of fatigue after global leaders sought to prevent the Israel-Hamas war from spreading

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The precious metal declined in the previous two sessions and traded below five-month highs hit last week.

Alex Kuptsikevich, senior market at the FxPro, said gold experienced profit-taking after an impressive rally following the escalation in the Middle East.

“The cost of a troy ounce of gold was down to $1,955 at the peak of the European session on Tuesday, after a two-week rally from $1,811 to almost $2000 since the 6th of October. This week's opening with a gap down was a sign that the market had built considerable profit-taking demand. The gap was closed during the day, but the decline continued Tuesday,” he said.

Theoretically, he said there is a more bullish scenario for gold.

“While we often hear that rising government bond yields are bearish for gold, it is unlikely that significant capital will buy into a falling market to avoid catching a falling knife. Signs of a bottom forming could trigger an essential shift in the overriding trade, triggering a capital flow out of gold and into bonds,” he added.

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Waheed Abbas

Published: Wed 25 Oct 2023, 9:37 AM

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