Prime Highlights:
- Dubai gold prices are at record levels at AED 409 for gold of 24-carat weight.
- International gold prices rise following the warning sign of economic slowdown by the Federal Reserve.
Key Facts:
- Spot gold at $3,391.7 per ounce; U.S. gold futures at $3,398.34.
- Federal Reserve keeps interest rates steady in the wake of inflation and labor market risks.
Key Background:
Prices of gold in the recent weeks have been extremely volatile as a result of the influence of myriad global economic forces. 24-carat gold prices in Dubai continue to stand at all-time highs of AED 409. Like the 22-carat gold, one can acquire which at a discount price of AED 378.5. Gold 21-carat can be accessed at AED 363. All these prices are driven by a general trend of a rise in the value of gold, as bolstered by heightened investors’ appetite for safe-haven instruments whenever there is economic uncertainty.
Globally, gold is higher, with spot gold at $3,391.7 an ounce and U.S. gold futures at $3,398.34. That followed after the Federal Reserve indicated that it will keep the interest rate in an attempt to dissuade a fear of inflation and job losses from spoiling growth. Fed Chief Jerome Powell noted that the challenge of maintaining growth was then to fight these emerging threats, and this gave promises of future rate reductions. An economic climate favorable to such supports gold since it acts as a buffer against economic dislocation and inflation.
Geopolitical news has also impacted investor mood, and the largest one till now has been the scheduled U.S.-China trade negotiations in Switzerland. While such talks have given some optimism to markets, there are risks associated with it, and that has also made gold a leading safe-haven asset, anyway. Furthermore, recent U.S. currency strength has also increased gold’s price for owners of other currencies, and that can affect foreign market demand.
In short, the corresponding harmony between Dubai gold stable prices, worldwide market trends, and Federal Reserve hawkish economic signals is also a reflection of the very highly interconnected character of determinants of gold’s prevailing market dominance. Even at moments of such uncertainty, investors remain certain that gold is something to hold onto in times of uncertainty.
