Dubai: Gold prices hit fresh all-time high, reach Dh399 per gram
Gold prices rallied to a new record high on Wednesday evening, crossing $3,300 per ounce globally just shy of Dh400 per gram in Dubai.
The precious metal prices zoomed past $3,300 per ounce due to the escalating US-China tariff war and a weaker dollar. It was trading at $3,310 per ounce, up 2.7 per cent at 7pm on Wednesday.
In Dubai, 24K was just shy of Dh400 per gram, trading at Dh399.0, up from Dh389 at the start of the week, gaining Dh10 per gram since Monday.
Among the other variants, 22K, 21K and 18K jumped to Dh369.5, Dh354.5 and Dh303.75 per gram, respectively.
The UN Trade and Development (UNCTAD) on Wednesday warned that the world economy is on a recessionary trajectory, driven by escalating trade tensions and persistent uncertainty.
If the global tariff war between the US, China and other countries escalates further, analysts expect the safe-haven metal will continue to gain further.
Financial institutions recently raised gold price forecasts to around $3,700 by the year-end and $4,000 by mid-2026.
'An impressive 25 per cent year-to-date rally has seen the spot gold price reach our 2025 target of $3,300 well ahead of schedule, raising the question of where do we go next?,' said Ole Hansen, head of commodity strategy, Saxo Bank.
He said gold 'has been on a tear' since Q4 2022 as geopolitical tension between Russia-Ukraine and Israel-Hamas war added to already strong demand for yellow metal from central banks seeking to diversify and de-dollarise their reserves.
'In the short to medium term, a combination of heightened global economic tensions, the risk of stagflation — a combination of lower employment, growth, and rising inflation — a weaker dollar, may continue to support bullion,' he said.
Vijay Valecha, chief investment officer at Century Financial, said US President Donald Trump's tariff policies have resulted in heightened uncertainty, undermining the usual safe-haven appeal of both US treasuries and the dollar.
'Despite the recent 90-day tariff pause followed by the weekend announcement of exemptions on consumer electronics and semiconductors, separate sector-specific duties on these products are expected soon. Moreover, there remains a risk of trade wars with key partners, particularly China — which has kept the markets on edge. The subsequent flight to safety has supported gold, which has risen by more than a fifth this year,' he said.
Linh Tran, a market analyst at xs.com, said the escalating trade war between the US and China is a key factor supporting gold prices.
'Trump has officially imposed tariffs of up to 145 per cent on Chinese goods, while China responded immediately with retaliatory tariffs of 125 per cent on US products, declaring it is ready to 'fight to the end'', Tran said.
'However, Trump's trade policy stance has shown signs of inconsistency, making market predictions more difficult. Earlier this week, he unexpectedly announced exemptions for smartphones and certain electronic devices from the high-tariff list, which fuelled a rally on Wall Street. He also hinted at the possibility of granting tariff exemptions for automobiles, raising hopes that negotiations could resume in some sectors. Nonetheless, this inconsistency in Trump's policy direction is generating significant uncertainty over US economic strategy, leading to a sharp decline in global risk appetite. In such a context, gold continues to be favoured as a safe-haven asset,' she said.
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