Gold prices in Dubai jumped to a record high on Wednesday evening, crossing Dh300 per gram.
The Dubai Jewellery Group data showed 24K selling for Dh300.50 per gram late in the evening. On the other hand, 22K, 21K and 18K were selling for Dh278.25, Dh269.25 and Dh230.75 per gram, respectively.
Globally, spot gold was trading at $2,461.9 per ounce at 8pm UAE time. Prices earlier touched $2,482 per ounce.
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“Gold prices have rallied almost 20 per cent year-to-date, among the strongest gains across commodities with its more volatile peer metal, silver, recording even stronger moves. The current rally in gold seems to be built on expectations that the US Federal Reserve will start to cut rates meaningfully before the end of 2024,” said Edward Bell, head of market economics at Emirates NBD Research.
“At the start of July, Fed funds futures priced in fewer than two 25bps cuts by the end of 2024, while by July 17th that pricing had increased to almost two and half cuts fully priced before year-end,” he added.
He added that the intuitive relationship between gold and rates is that as rates move lower and yields decline on US Treasuries and other fixed-income instruments, gold becomes more attractive. “However, while the gain in gold prices in July may have been catalysed by rate expectations, in the medium- and longer-term, their influence on gold prices holds less significance,” he added.