Dubai gold hits Dh412.5 amid Middle East tensions
22K gold at Dh381.75, highest official rate in Dubai
DUBAI gold prices surged on Friday, climbing to multi-month highs as rising Middle East tensions sent investors flocking to safe-haven assets.
With Israel’s strikes on Iranian nuclear facilities rattling markets, the local gold rate for 24K jumped Dh3.75 to reach Dh412.5 per gram. Meanwhile, 22K hit Dh381.75, marking its highest official level to date.
The surge reflects both global and regional unease. Spot gold in international markets rose 1.38% to $3,426.01 by 4:07 GMT, after briefly touching levels last seen in April. Analysts now watch closely for a potential breakout past the psychological $3,500 barrier. Dubai shoppers and traders are bracing for further gains if geopolitical shocks persist.
Investor shift
Gold’s appeal intensified as markets reacted to escalating conflict in the Middle East. The sudden turn in the Iran-Israel situation, coupled with fears of broader regional instability, diverted investor focus away from risk-based assets. The result was a fresh rally in bullion, with US futures climbing to $3,449.95.
Local traders at the Dubai Gold Souq reported a spike in interest, though many advised caution amid the price volatility. Wholesalers also noted disruptions following an unrelated Air India crash in Gujarat, India – a key region for the city's diamond supply and tourist traffic.
Global drivers
Fueling gold’s rally further were fresh signals from the US economy. A cooling labour market, alongside slower inflation, has pushed expectations for interest rate cuts forward. Traders now anticipate a 55-basis point cut by year-end, beginning in September – a shift from earlier projections of October.
Such monetary easing tends to weaken the dollar and lift gold prices, strengthening the outlook for continued gains.
Other metals slip
While gold soared, other precious metals saw minor corrections. Spot silver dipped 0.23% to $36.29 per ounce, platinum fell 0.83% to $1,284.44, and palladium edged 0.15% lower to $1,053.99.