Gold And Silver Prices Witness Big Surge Ahead Of 'Festival Of Lights' In The UAE

On Monday, the price of gold in the UAE marked a significant rise, with the 24K variant climbing by Dh1.5 per gram to reach Dh331.0. This increase is part of a consistent upward trend seen in the precious metal's value. The prices of 22K, 21K, and 18K gold also experienced hikes, settling at Dh306.5, Dh296.75, and Dh254.5 per gram, respectively, by 6pm UAE time.

The surge in gold prices can be attributed to a mix of global monetary policies and escalating geopolitical tensions. Specifically, the easing of monetary stances by major central banks and the rising unrest in the Middle East have played crucial roles. Gold's value has been on an upward trajectory for five consecutive days, setting a new record high. At the same time, spot gold reached $2,739.9 per ounce, marking a 0.68 per cent increase.

In response to these market changes, the People's Bank of China (PBoC) implemented a cut in its key interest rates, echoing a similar move by the European Central Bank (ECB). These actions form part of broader stimulus efforts aimed at bolstering the economy.

Vijay Valecha, Century Financial's chief investment officer, pointed to the geopolitical landscape as a major driver behind the recent rise in gold's appeal. He noted, "Geopolitical tensions escalated further on Monday, pushing gold higher as reports surfaced of Israel preparing imminent attacks on financial sites linked to Lebanon's Hezbollah. Additionally, traders are adjusting their portfolios ahead of the November 5 US election, which polls indicate could be one of the closest in decades between Donald Trump and Kamala Harris."

Valecha further explained the shifts in gold investment dynamics. While Chinese investors have pulled back due to the PBoC's focus on stimulating equity markets, Western investors have become more active. This change is evidenced by significant inflows into offshore gold ETFs and foreign gold mining ETFs, marking a shift from earlier trends of outflows. Investors now anticipate a 90 per cent chance of a rate cut in November, which has fueled the rally in gold prices.

Tito Iakopa, FlowCommunity's commercial director, emphasized gold's continued allure as a safe-haven asset amid unresolved geopolitical tensions, especially in the Middle East. The ongoing conflict in the region, without any foreseeable resolution, underscores the metal's stability and reliability as an investment.