Gold sees sudden Dh8 price spike after weekly loss: Here's why
Dubai: Gold prices bounced back on Monday, climbing more than 2% after two straight weeks of losses, as investors turned cautious ahead of a key US interest rate decision and reacted to ongoing uncertainty around global trade.
Globally, spot gold rose to around $3,316 an ounce, clawing back most of last week's 2.4% drop. In the UAE, prices rose by Dh8 a gram by Monday evening, with a gram of 22K selling at Dh369.50 (and Dh399 for 24K).
Why sudden move?
The sudden move comes as markets await the US Federal Reserve's upcoming decision on interest rates, expected on Wednesday. Although the Fed is likely to hold rates steady, investors are closely watching for any signals about future rate cuts or changes in economic outlook.
The recent recovery in gold follows a sharp rally earlier this year, when prices surged 26% to a record high above $3,500 an ounce in April. That run-up was driven largely by fears over global economic stability, rising geopolitical tensions, and strong demand from central banks and Chinese investors.
Monday's spike was also supported by a dip in the US dollar. A weaker dollar tends to make gold more attractive to international buyers, since the metal is priced in dollars. The Bloomberg Dollar Spot Index fell by 0.4%, adding to gold's appeal.
Adding to the uncertainty were recent comments from US President Joe Biden, who said there are no immediate plans to hold talks with Chinese President Xi Jinping. Trade tensions between the US and China have weighed on global markets in recent weeks, and gold often benefits in such risk-off environments as a "safe-haven" asset.
Although the US economy continues to show strength — with surprisingly strong job data reported last week — this only complicates the picture for rate decisions. Some, including former US President Donald Trump, argue that rates should be cut regardless, but analysts believe the Fed may hold steady due to a still-firm labor market.
Next steps?
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
18 hours ago
- The National
Oil heading for weekly gain amid optimism over US-China tariff talks
Oil prices were up on Friday and were heading for their first weekly gain in three weeks amid hopes for a US-China deal on tariffs. Brent, the benchmark for two thirds of the world's oil, was up 0.11 per cent at $65.41 a barrel at 2.49pm UAE time. West Texas Intermediate, the gauge that tracks US crude, added 0.05 per cent to $63.40 per barrel. Both Brent and WTI, which reversed earlier losses on Friday, are on pace for a 4.2 per cent weekly gain. For the year, they are down about 12 per cent. Crude futures posted modest gains on Thursday, but the market became more optimistic after a phone call between US President Donald Trump and China's Xi Jinping, who agreed to resume negotiations on trade and tariffs. The US and China are the two main protagonists in the global trade war, imposing tit-for-tat levies on each other's imports. However, they agreed to a detente on May 12, with Washington lowering its 145 per cent tariffs on Chinese imports to 30 per cent, while Beijing dialled down its own levies from 125 per cent to 10 per cent. The call between the two leaders, a sign of progress in their countries' negotiations, 'prompt[ed] relief after a recent escalation in tensions', analysts at Vanda Insights said. Crude prices took a hit after Mr Trump's sweeping global tariffs announced on April 2 disrupted stock markets and reignited fears of a global recession. However, with many of the tariffs temporarily paused and the US seeking deals with its partners, the uncertainty has reduced. A positive sign for oil prices is the decline in US oil inventories, indicating demand for the commodity remains strong. At the moment, market fundamentals seem to remain balanced, especially after Opec+ last month agreed to increase its monthly oil output at 411,000 barrels per day for July, the same as in May and June, analysts at Fitch unit BMI said. The decision was 'in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories', the group said. Opec+ noted that gradual increases may be paused or reversed 'subject to evolving market conditions' and 'flexibility will allow the group to continue to support oil market stability'. Analysts say the move by Opec+ may be a gesture to mollify Mr Trump, who has called for lower crude prices. BMI analysts, however, cautioned that any slower economic growth later in 2025 'will see markets tip into oversupply'. They also expect a similar production rise for August, 'should market conditions and prices remain steady'. 'But both weaker demand for oil and increased production from both Opec+ and non-Opec producers will add to downside price pressures in the coming quarters,' BMI said. Upstream oil investments are projected to be under $570 billion in 2025, which would be a 6 per cent decline, marking the first annual drop since the Covid-induced slide in 2020 and the largest since 2016, the International Energy Agency said on Thursday. The decrease is being attributed to lower oil prices and demand expectations, amid economic uncertainties, the Paris-based IEA said.
Arabian Post
a day ago
- Arabian Post
Oil Holds Gains on US China Trade Talks Optimism
Oil prices maintained stability following a notable rise as market participants reacted to constructive signals from high-level discussions between the United States and China. Brent crude hovered near $65 a barrel, positioning itself for a weekly advance that would mark its first since mid-May. Similarly, West Texas Intermediate settled close to $63, reflecting a cautious but optimistic outlook amid evolving geopolitical dynamics. The dialogue between President Donald Trump and Chinese President Xi Jinping marked a pivotal moment in addressing ongoing trade frictions that have weighed heavily on global markets. Both leaders expressed commitment to continued negotiations targeting tariff disputes and supply chain concerns, particularly regarding rare earth minerals critical for technology and manufacturing sectors. This development provided a welcome boost to commodity traders, who have been closely monitoring the situation amid fears of escalating protectionism. Market analysts have noted that oil, being highly sensitive to international trade flows and economic growth forecasts, often mirrors the broader sentiment surrounding US-China relations. The prospect of easing trade tensions suggested potential improvements in global demand for energy, which had been dampened by uncertainty and tariff barriers affecting industrial output. ADVERTISEMENT Despite the positive tone, traders remained vigilant. The recent gains followed a period of volatility driven by mixed signals from trade negotiations and concerns about slowing economic activity in key consuming regions such as China and Europe. Economic indicators have highlighted uneven growth patterns, prompting cautious optimism rather than outright confidence. The agreement to pursue further talks on rare earth minerals carries significant implications beyond the energy markets. These materials, essential for manufacturing electronics, renewable energy technologies, and defence equipment, have been at the centre of a strategic tussle between the two economic superpowers. Supply disruptions or restrictions have ripple effects on various sectors, influencing broader commodity market trends. Financial markets also responded to the potential for stabilisation in trade relations, with equity indices showing tentative gains in tandem with oil's upward movement. Investors appear encouraged by the prospect of de-escalation, although the path to a comprehensive trade deal remains uncertain. The oil market's reaction underscores the interconnectedness of geopolitical developments and commodity pricing. While the immediate impact of the talks has been supportive for prices, the sector continues to face headwinds, including fluctuating demand forecasts and supply-side challenges. OPEC's production decisions, US shale output levels, and inventories in key storage hubs remain closely watched variables that could influence price trajectories. The broader economic backdrop factors into market calculations. Growth slowdowns in major economies have triggered expectations of weaker fuel consumption, while concerns about inflation and central bank policies contribute to volatility in oil and financial markets. The Federal Reserve's stance on interest rates and stimulus measures in China are particularly influential, shaping investor sentiment and demand projections. Traders are also monitoring geopolitical tensions outside the trade sphere, including developments in the Middle East and North Africa, which historically affect oil supply security. Any escalation in these regions tends to prompt risk premiums on crude prices, adding complexity to an already dynamic market environment. In the supply chain arena, ongoing challenges related to refining capacity and transportation logistics remain points of focus. Infrastructure bottlenecks and maintenance schedules have periodically constrained fuel availability, impacting pricing at the consumer level. These operational factors, coupled with geopolitical and economic influences, create a layered context for oil market behaviour.
Gulf Today
a day ago
- Gulf Today
China's export curbs on rare earth minerals worry Europe
China is flexing its economic muscle in more senses than one. Its decision to restrict exports of the rare minerals and magnets has sent shivers down the spines of global automakers in Germany and in the United States. Rare earth minerals are needed in key sectors like car manufactures, semi-conductor industry, aerospace industry. The Chinese possess half of the global rare earth mineral reserves. The Chinese decision was mainly to counter US President Donald Trump's refusal to export crucial computer chips needed for AI, and the US' refusal to allow imports from Chinese chipmaker Huawei. More importantly, what has angered the Chinese is the refusal of student visas to Chinese students, and the cancellation of the visas of those who are students in American universities. Europe is caught in a crossfire in the trade war between the giants, the US and China. Europeans, as well as Americans, have suddenly realised that it is not such a good thing to depend on China for either rare earth minerals or even manufactured goods including cars. The West is desperately looking to reduce its dependence on China and it is seeking to diversify its supply chain. European Union (EU) Commissioner for Industrial Strategy Stephane Sejourne said, 'We must reduce our dependencies on all countries, particularly on a number of countries like China, on which we are more than 100 per cent dependent.' Meanwhile EU Trade Commissioner Maros Sefcovic said that he was in touch with his Chinese counterpart and they had agreed to clarify the rare earth minerals situation. Major automakers like Mercedes and BMW are claiming that they have enough inventories and their production schedules will not be affected. But it is clear that shortages are looming on the horizon. The US-China trade talks are quite crucial, even as American President Donald Trump wrote on his social media platform, Truth Social, 'I like President Xi of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH.' Trump is blaming China for breaking the deal made in Geneva to roll back the tariffs that each side had imposed on the other, Trump reduced the tariffs from 145 per cent to 30 per cent, and China reduced it from 135 per cent. Mercedes-Benz production chief Jeorg Burzer said he was talking to top suppliers of the company about building 'buffer' stocks anticipating trouble in the future. He said that Mercedes is well stocked for now and production schedules are not affected. But automakers in Europe and America have aired their worries about the curbs on Chinese exports of the rare earth minerals. Many of the captains of industry are lobbying with their governments to solve the deadlock. Wolfgang Weber, CEO of Germany's electrical and digital industry association, ZVEI, said in an emailed statement, 'Companies currently feel abandoned by politicians and are partly looking for solutions to their difficult situation on their own in China.' Trump's declaration of the tariff war against America's trade partners had mostly caused quiet murmurs, and many countries from the EU and other countries like Japan are trying to work out a trade deal without crossing swords with the US. But China was not willing to take Trump's tariffs passively. It is aware that it has power enough to counter American tariffs with tariffs of its own. The Chinese have always been defiant of the Western world, even when they did not have the economic power they now have. There is of course the harsh fact. China needs the Western countries to maintain its economic growth. It is its exports to Western countries that have made it rich and powerful. Europe and US need the cheap labour of China, and China needs the Western markets. They have to strike a deal with each other.
