Gold continues its record-breaking run, climbing for the third consecutive day and driving UAE prices higher, as investors respond to rising demand and global market trends for the precious metal.
Gold Extends Record-Breaking Streak, Pushing UAE Prices Higher
Gold shows no signs of slowing as it hits fresh records for the third consecutive day. When trading began on Wednesday, 24K gold was priced at Dh542 per gram, reflecting an increase of over Dh20 per gram in just a week. Meanwhile, 22K, 21K, 18K, and 14K gold rates rose slightly to Dh502, Dh481.25, Dh412.50, and Dh321.75, respectively, compared to Tuesday’s opening rates.
On the international front, spot gold reached $4,496.42 at 10am, marking a 0.41% rise from Tuesday. This week, the precious metal hit multiple new highs, climbing Dh10 within 24 hours to continue its impressive run. Silver also surged, touching record levels of $72.37, up 2.02% since Tuesday.
Geopolitical Issues
Gold continued its upward trajectory after a period of consolidation and sideways movement, fueled largely by rising geopolitical tensions and shifting investor sentiment toward safer assets, according to Samer Hasn, Senior Market Analyst at Insider18.
Hasn highlighted that the recent gains in gold were largely triggered by the resurgence of geopolitical risks, which prompted investors to seek refuge in the safe-haven asset. “The recent rally in gold emerged as geopolitical concerns resurfaced, prompting a clear shift in positioning toward safety, despite the usual pressures from the bond market failing to materialize,” he explained.
He pointed to multiple regions where these risks are taking shape. “From Latin America, where there is the potential for a major US military intervention, to the Middle East, where escalating rhetoric around a possible Israel-Iran confrontation has put Iran’s ballistic missile program back into the spotlight, geopolitical factors have played a significant role in supporting gold,” Hasn noted.
Monetary policy expectations have also contributed to gold’s upward momentum. According to Hasn, markets are increasingly anticipating that the Federal Reserve may ease monetary policy earlier than expected next year, driven by softer inflation readings and weaker labor market indicators. “Expectations of looser monetary policy reduce the opportunity cost of holding assets that do not yield interest, such as gold. This dynamic has supported not just gold, but also silver and other commodities,” he said.
Interestingly, gold’s recent strength comes despite conditions that would typically be unfavorable for the precious metal. Hasn observed that US 10-year Treasury yields have remained close to their highest levels since September, while bond market volatility, as measured by the MOVE index, has fallen toward lows last seen in 2021. “Normally, this combination would put downward pressure on gold. Yet, the metal continues to climb, suggesting that this rally is being driven more by risk aversion and investor positioning rather than bond market dynamics,” he explained.
This unique environment has highlighted gold’s appeal as an asset offering clear purpose amid broader market uncertainty. “With risk appetite uneven and market conviction fragile, gold stands out as one of the few assets that provides a clear safe-haven role,” Hasn added.
North America, in particular, has seen sustained inflows into gold, with investors adding around $1 billion in November alone, extending a streak of six consecutive months of net inflows. Hasn attributed this trend to several factors, including rising gold prices, heightened expectations of Federal Reserve rate cuts, and the intensifying geopolitical environment. “If these inflows continue, the current breakout in gold could shift from being a symbolic rally to a more structural movement in the market in the weeks ahead,” he said.
Hasn emphasized that gold’s rally reflects a broader shift in market sentiment. Investors are increasingly positioning themselves defensively as uncertainties mount across different regions and economic indicators signal potential policy easing. The combination of geopolitical risks and anticipated monetary loosening has created favorable conditions for the precious metal, overriding traditional factors that might otherwise constrain its gains.
He also noted that gold’s recent performance is part of a larger trend in commodity markets. Other precious metals and key commodities have experienced upward pressure as investors reallocate funds in response to expected central bank actions. “Gold is not moving in isolation. Silver and parts of the broader commodity complex have benefited from the same dynamics of lower interest rate expectations and heightened geopolitical risk,” Hasn added.
The analyst further pointed out that market participants are now paying closer attention to geopolitical developments in Latin America and the Middle East, as potential conflicts or escalations could further bolster demand for safe-haven assets. This heightened risk perception, combined with loose monetary policy expectations, creates a supportive environment for gold.
Overall, Hasn concluded that gold’s current rally reflects a mix of geopolitical uncertainty, strategic positioning by investors, and expectations of future monetary easing. Despite certain market anomalies, such as elevated Treasury yields and low bond market volatility, gold’s appeal remains strong as a safe-haven asset. Should inflows continue, the precious metal may see a more sustained and structural upswing in the near term, making it an important asset for investors seeking clarity and stability amid uncertain conditions.
