
UAE: Gold prices slip further as tariff row, geopolitical tensions ease
Gold prices slipped slightly at the opening of the markets in Dubai on Wednesday.
According to Dubai Jewellery Group data, the 24-karat dipped to Dh388.25 per gram. The 22-karat, 21-karat, and 18-karat variants opened lower at Dh359.75, Dh345, and Dh295.5 per gram, respectively.
Spot gold was trading at $3,226.59 per ounce, down 0.5 per cent. Vijay Valecha, chief investment officer of Century Financial, said gold fell due to optimism around the US-China trade deal.
"Improved risk sentiment following the announcement of a temporary deal between the United States and China to reduce tariffs dragged the safe-haven asset's price lower. Additionally, it was reported that the US will cut 'de minimis' tariffs on China shipments from 120 per cent to 54 per cent, with a minimum flat fee of $100 to remain,' he said.
On the geopolitical front, Ukrainian President Volodymyr Zelensky noted he is prepared to meet Russian President Vladimir Putin this week, shortly after US President Donald Trump urged him to 'immediately' accept the Russian leader's offer to hold peace talks in Turkey. Any signs of escalating tensions could boost the safe-haven flows, benefiting the yellow metal.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Arabian Business
a day ago
- Arabian Business
UAE economy bucks global trend as Europe, U.S. recession risks grow
The United Arab Emirates' economy is set to grow in 2025 due to its diversified economy and strong fiscal buffers, remaining largely insulated from global headwinds despite recession warnings for Western economies by JPMorgan, Moody's and Fitch. The Gulf nation's economic resilience contrasts with rising concerns of a mild recession in the United States and parts of Europe in the third or fourth quarter of 2025. Analysts cite non-oil sector performance, strategic investments and fiscal strength as key factors behind the divergence. 'The UAE's projected 4.5 per cent growth in 2025 stands in sharp contrast to a global outlook marked by mounting risks and downward revisions,' Osama Al Saifi, Managing Director for MENA at Traze, told Arabian Business. The country's economy grew by 3.8 per cent year-on-year in the first nine months of 2024, with non-oil GDP contributing about AED 987 billion, approximately 75 per cent of the total AED 1.322 trillion. The anticipated recovery in oil GDP, as OPEC+ cuts are gradually reversed, could offer an additional growth driver. During this period, the UAE saw significant growth across several sectors, Vijay Valecha, Chief Investment Officer at Century Financial, noted. 'The transport and storage sector led the way at 7.9 per cent growth due to a 20 per cent surge in airport passenger traffic. The construction and building sector expanded notably by 7.4 per cent, driven by significant urban infrastructure investments, while the financial and insurance sector grew by 6.8 per cent,' he said. UAE financial markets have demonstrated greater resilience than global peers during recent volatility. 'Out of 13 major indices analysed, only six have recovered from recent market drawdowns – with Dubai and Abu Dhabi indices taking about 38 and 28 days respectively to recover, ranking fifth and third in recovery speed,' Valecha added. In the first quarter of 2025, Valecha said, the Dubai Financial Market welcomed 19,366 new investors, with 86 per cent being foreign nationals. The market recorded its highest Average Daily Trading Value in over a decade at AED 663 million, marking a 67 per cent increase from the same period in 2024. Recession concerns easing but risks remain The International Monetary Fund projects global trade growth to slow to 1.7 per cent this year, presenting a significant test to Gulf economies. With growth in the Gulf Cooperation Council expected to moderate to around 3 per cent, down from earlier projections, external risks remain substantial. JPMorgan recently revised its U.S. recession probability from 60 per cent to 40 per cent following a temporary pause in U.S.-China tariff actions. U.S. growth is projected to decrease to 1.8 per cent in 2025, one percentage point lower than in 2024. 'The likelihood of a global recession in 2025 remains elevated due to escalating trade frictions and protracted monetary tightening,' Al Saifi said. 'In this regard, economies strongly exposed to the U.S., such as Canada and Mexico, could see possible contractions.' For the Gulf region, recessionary pressures would most likely be transmitted through a downturn in global demand and subsequent strain on oil prices. 'A recession in the U.S. or Europe would likely exert downward pressure on global oil demand and weigh on fiscal performance,' Al Saifi explained. Nevertheless, Gulf economies appear better positioned than in previous cycles. 'Substantial sovereign wealth assets, contained inflation, and firm domestic demand provide a degree of protection,' Al Saifi added. 'Given the region's currency pegs to the U.S. dollar, any interest rate reductions by the Federal Reserve would translate into more accommodative financial conditions.' Hamza Dweik, Head of Trading at Saxo Bank MENA, noted that the UAE's 'strong macroeconomic fundamentals, active IPO pipeline, and diversified revenue streams position it as a 'relative safe haven in the global landscape.' Inflation in the UAE is expected to remain at approximately 2 per cent throughout 2025, despite upward pressure from global tariffs. 'Consumer spending is expected to expand 4.3 per cent, supported by steady economic growth and a likely easing of interest rates,' Al Saifi said. This contrasts sharply with persistent inflation challenges in Western economies. Sectors show varying vulnerability Not all sectors in the UAE economy are equally protected from global headwinds, experts say. 'Oil and gas, despite aggressive diversification measures, still contributes about 25 per cent of the UAE's GDP,' Valecha said. 'In times of recession, global oil demand could fall drastically, impacting many UAE-based energy firms through falling oil prices.' Tourism and hospitality could see reduced vacation spending despite Dubai attracting 18.72 million international visitors in 2024, marking a 9.2 per cent year-on-year increase. 'This could mean that airlines like Emirates and Etihad, along with major hotel chains, may experience a decline in revenues,' he added. The real estate sector, which relies on foreign investment and capital flows, could also face challenges. Valecha added that major property developers could potentially witness slower sales and declining property prices and construction projects may face delays or cancellations in extreme cases, especially if tied to foreign investments. Dweik identified specific vulnerable areas: 'Logistics, real estate – particularly off-plan investment-driven projects – and non-oil exports like aluminum and petrochemicals are most vulnerable to a potential U.S. recession.' More resilient sectors include consumer staples, healthcare and utilities. 'A defensive sector like healthcare may remain well supported by inelastic demand for medicines and healthcare products, regardless of overall economic conditions,' Valecha explained. 'Companies like Dubai Electricity and Water Authority and Abu Dhabi National Energy Company, backed by the state, would be insulated from market volatility.' Trump visit strengthens economic outlook The UAE's economic prospects received a significant boost from recent agreements with the United States following President Donald Trump's May visit. Commercial agreements exceeding $200 billion were signed, with a broader investment commitment of $1.4 trillion over the next decade. Bilateral trade talks focused on artificial intelligence, advanced technologies, and semiconductors, culminating in the launch of the US-UAE AI Acceleration Partnership. The UAE secured a deal to import 500,000 Nvidia H100 chips annually and will develop a 5-gigawatt AI data centre in Abu Dhabi – set to be the largest outside the US. In the energy sector, the UAE pledged to increase investments in U.S. energy projects from $70 billion to $440 billion by 2035. This includes a $25 billion partnership between UAE sovereign wealth fund ADQ and U.S. firm Energy Capital Partners, and a $60 billion partnership with ExxonMobil, Occidental Petroleum, and EOG Resources. The manufacturing sector will see Emirates Global Aluminum invest $4 billion in a new primary aluminum smelter in Oklahoma – the first of its kind in the U.S. in 45 years. A Gallium project with RTX and the UAE's Tawazun Council aims to secure U.S. semiconductor and defence supply chains. 'Trump's visit yielded substantial outcomes in artificial intelligence, energy, aviation, manufacturing, and critical minerals,' Valecha said. 'President Trump's imposition of a 10 per cent baseline tariff on UAE imports – lower than those faced by many other nations – had only a marginal impact.' Investment patterns and opportunities The global economic environment has prompted significant shifts in investment behaviour. 'We are observing a similar trend among MENA investors, who are increasingly diversifying away from U.S.-centric portfolios,' Dweik said. 'While the U.S. remains a key market, recent volatility and policy uncertainty have prompted a tilt toward European and emerging market assets.' Valecha cited analyst expectations of significant fiscal stimulus worth €500 billion over the next 12 years following recent German elections. 'This fiscal stimulus would focus on infrastructure spending in Germany, the largest economy in the Eurozone, accounting for about one-fourth of the region's GDP,' he explained. UAE stock markets currently offer value opportunities, according to Valecha, with Dubai's main stock index trading about 16.5 per cent below its five-year average valuation. The Abu Dhabi Securities Exchange index shows a similar discount of about 16.3 per cent from its five-year average. Liquidity conditions in UAE markets have strengthened significantly. 'In Q1 2025, DFM recorded its highest Average Daily Trading Value in over a decade at AED 663 million, marking a 67 per cent increase from AED 398 million in Q1 2024,' Valecha noted. For regional investors navigating this environment, experts recommend diversification. 'Investors should consider blending traditional and alternative assets, such as sukuk, infrastructure, and private equity, while allocating capital across resilient sectors like healthcare, technology, and tourism,' Dweik said. Looking ahead, the IMF forecasts that the UAE's GDP will increase by 4 per cent in 2025 and by 5 per cent in 2026, making it the fastest-growing economy among Gulf Cooperation Council nations. The UAE economy is projected to surpass the overall growth rate of oil-exporting nations, which are expected to grow by 2.6 per cent in 2025 and 3.1 per cent in 2026.


Al Etihad
2 days ago
- Al Etihad
Musk's father says Elon made a mistake 'under stress' and that Trump will prevail
9 June 2025 13:07 MOSCOW (Reuters)The row between Elon Musk, the world's richest man, and US President Donald Trump was triggered by stress on both sides and Elon made a mistake by publicly challenging Trump, Musk's father told Russian media in and Trump began exchanging insults last week on social media with Musk denouncing the president's sweeping tax and spending bill as a "disgusting abomination.""You know they have been under a lot of stress for five months - you know - give them a break," Errol Musk told the newspaper during a visit to the Russian capital."They are very tired and stressed so you can expect something like this.""Trump will prevail - he's the president, he was elected as the president. So, you know, Elon made a mistake, I think. But he is tired, he is stressed."Errol Musk also suggested that the row "was just a small thing" and would "be over tomorrow."Trump said on Saturday his relationship with billionaire donor Musk was over and warned there would be "serious consequences" if Musk decided to fund US Democrats running against Republicans who vote for the tax and spending bill. Trump had named Musk to head a controversial effort to downsize the federal workforce and slash spending.


Gulf Today
4 days ago
- Gulf Today
Russian CB cuts key rate to 20%, inflation slowing down
The Russian central bank cut its key interest rate by one percentage point to 20 per cent on Friday, saying economic growth is cooling down and inflation is slowing. 'Current inflationary pressures, including underlying ones, continue to decline. While domestic demand growth is still outstripping the capabilities to expand the supply of goods and services, the Russian economy is gradually returning to a balanced growth path,' the bank said in a statement. A Reuters poll had predicted that the central bank would keep the key rate on hold. It had been at 21 per cent since last October to curb inflation in the overheated economy, which is focused on the needs of the military fighting in Ukraine. As a result, Russia's economic growth rate fell to 1.5 per cent year-on-year in the first four months of 2025, compared to 4.3 per cent last year, prompting sharp criticism of central bank governor Elvira Nabiullina. Consumer prices have risen by 3.39 per cent since the start of the year, compared to 3.88 per cent in the same period last year, while the annualised inflation rate fell below 10 per cent in May after peaking at 10.34 per cent in March. The central bank forecasts inflation this year at 7 per cent to 8 per cent and economic growth at 1 per cent to 2 per cent. The Economy Ministry is more optimistic, predicting growth of 2.5 per cent. The strengthening of the rouble, which has rallied by about 40 per cent against the dollar since the start of the year, has aided the central bank in its fight against inflation by making imported goods cheaper. Its rise has been largely thanks to US President Donald Trump's efforts to bring Russia and Ukraine to the negotiating table. But most analysts agree that without any sign of a breakthrough in the talks, the rouble is waiting for a trigger to start falling. 'Tight monetary policy has a particularly strong effect on the decrease in prices for non-food goods, including through the rouble appreciation,' the central bank said. Inflationary expectations among households, an important gauge monitored by the central bank, rose for a second month in a row in May to a level last observed around the time of the last rate hike in October. Some analysts have linked the rise in inflationary expectations to a planned mid-year nationwide increase in payments for electricity, gas, water, and communal services for households, suggesting that the regulator might ignore the gauge this time. Food inflation, with prices for staples like potatoes tripling since last year due to a poor harvest, has severely affected Russia's poor. The harvest outlook for this year will heavily influence the central bank's thinking. 'As for food products and services, inflationary pressures remain high,' the bank said. The tight monetary policy, with the key rate at its highest level since the early 2000s and also the highest among major economies in the BRICS group, has made loans and debt financing, and therefore investment, inaccessible for many Russian firms. The central bank counters this by saying that its research shows enterprises in most sectors make enough profits to finance their investments and that the situation even in vulnerable sectors, such as construction, does not pose systemic risks. Meanwhile Russia's economic growth slowed to 1.4 per cent year-on-year in the first quarter of 2025, the lowest quarterly figure in two years, data from the official state statistics agency showed on Friday. Economists have warned for months of a slowdown in the Russian economy, with falling oil prices, high interest rates and a downturn in manufacturing all contributing to headwinds. Moscow reported strong economic growth in 2023 and 2024, largely due to massive state defence spending on the Ukraine conflict. But economists have cautioned that growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity. The Russian economy grew by 1.4 per cent year-on-year in the first three months of the year, the lowest quarterly figure since the first quarter of 2023, Rosstat data showed. The economy expanded 4.5 per cent in the previous quarter, according to the data. Prices have also been rising quickly across the Russian economy for months, driven up by massive government spending on the Ukraine conflict and deep labour shortages. Inflation in April remained above 10 per cent for the third month in a row, figures showed. Last month, the Russian central bank maintained its key interest rate at 21 per cent, with inflation starting to decline but new risks facing the Russian economy because of global economic turbulence triggered by US trade tariffs. 'A further decrease in the growth rate of the global economy and oil prices in case of escalating trade tensions may have proinflationary effects through the rouble exchange rate dynamics,' the central bank said in a statement. Agencies