Gold prices in Dubai rose on Thursday as an increased safe-haven demand carried it on after U.S. President Donald Trump announced an increase in 25 percent tariff on Indian imports aimed at ending India-Russia trade relations. The action has fuelled tensions around trading and sent shockwaves throughout the world markets including the gold market in Dubai. Gold is shining once again as geopolitical woes and economic turmoil are driving investors into less risky assets.
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Gold Prices Rise in Dubai
Gold prices in Dubai reacted quickly:
- 24-carat gold increased by AED0.5 and settled at AED407
- 22-carat gold rose by AED0.75 to AED377
- 21-carat gold has increased by AED0.5 to AED361.25
- 18-carat gold climbed from AED0.5 to AED309.75
This added value can be attributed to the city’s position as a trade hub in the global gold trade and as a safe haven for investors and shoppers during uncertain times.
Global Factors Driving the Surge
Spot gold climbed 0.20 percent to 3,378.55 dollars globally whereas U.S. gold futures gained 0.37 percent to 3,446.22 dollars. The current trade tiff has increased the appeal of gold as a source of volatility protection.
Its tariffs are scheduled to be imposed 21 days after August 7, and they could raise duties on selected Indian exports as high as 50 percent, one of the highest rates on imports against any trade partner in the United States.
Weaker Dollar Lends More Support
The other important contributor to the surge: the U.S. dollar index fell to a one week low after the U.S. reported unexpectedly poor jobs numbers. Gold was further made attractive to international investors by the weaker dollar and the renewed expectations that the Federal Reserve will lower their interest rates in September.
Based on CME Group FedWatch Tool, it is currently seen at 94 percent that there will be a 25-basis point rate reduction come next month. Minneapolis Fed President Neel Kashkari stated that he does not have all the data on the effects of tariffs on inflation, but monetary policy is imminently needed to offset economic stagnation.
Precious Metals Market Reaction
- Spot silver rose from 0.47% to $38.03
- Platinum dropped marginally by 0.28% to $1,329.85
- Palladium jumped from 1.27% to $1,146.50
- Copper was stable at $4.39
What This Means for Dubai
Dubai 24-carat gold prices have increased to AED407 and this has set investors and tourists on their toes. The city is once again proving to be a global gold capital, especially during periods of uncertainty in global trade. The reason could be either investment or ritual, but one thing is clear: the existing scenario indicates that the safe-haven demand is back and is growing.
With the gold prices in Dubai on a continuous upward trend and threats emerging on several fronts, including trade wars and possible rate cuts, it seems that in this market scenario, the safest bet will be given on gold. As a long-term investor or a consumer aiming at hedging against inflation, the gold rally in Dubai is one of the trends that you may not want to overlook.