UAE Gold Holds Above Dh620 as Bullion Rally Gains Momentum Amid Global Risk Concerns.
Dubai: Gold prices in Dubai continued their upward climb on Friday morning, intensifying the pressure on shoppers and investors amid one of the strongest bullion rallies seen in decades.
At 8:30 a.m., 24-karat gold in Dubai climbed to Dh626 per gram, up from Dh622.25 on Thursday, while 22-karat rose to Dh579.50 from Dh576.25 a day earlier. The surge keeps local prices near historic highs, underscoring a clear upward trend that has dominated the market throughout February.
February Snapshot: Gold Maintains Steady Rise
This month’s price movement highlights a broad upward trend despite occasional pullbacks. At the beginning of February, 24-karat gold traded around Dh589.50 per gram, dipping sharply to Dh564.25 on the second day. From there, prices climbed steadily, surpassing Dh600 by mid-month and continuing to strengthen through the final week.
By February 19, 24-karat gold had climbed to Dh601.75, later advancing to the Dh615 range before surpassing Dh620 in the final days of the month, reaching Dh626 on Friday. The 22-karat segment followed a similar path, rising from around Dh545 at the start of February to nearly Dh580 by month-end.
Overall, the trend indicates a strong upward momentum, with minor corrections failing to derail the broader rally.
Geopolitical Tensions Keep Global Gold Prices Elevated
International markets remain the key driver of local gold movements. Globally, gold hovered near $5,190 an ounce after gains in the previous session, supported by ongoing geopolitical uncertainty linked to US–Iran nuclear talks and a significant U.S. military build-up in the Middle East.
While negotiators reported progress in the latest round of Geneva talks, lingering uncertainty continues to sustain safe-haven demand. This geopolitical backdrop has propelled gold to roughly a 20% gain so far this year, putting it on track for its longest monthly rally streak since the early 1970s.
Linh Tran, Market Analyst at XS.com, noted that the market is currently stabilizing at elevated levels rather than entering a fresh surge.
Gold Near $5,200 as Safe-Haven Demand Offsets Geopolitical Risks
“Gold is currently trading just below the $5,200 per ounce mark, reflecting a balance between safe-haven demand and expectations of easing geopolitical tensions,” Linh Tran said. “The latest rounds of talks have not produced a clear outcome, leaving geopolitical risks present but not escalating.”
Institutional flows continue to support the market’s resilience. Tran highlighted a notable accumulation trend: “SPDR Gold Trust purchased nearly 19 tons over three consecutive sessions. The swift return of institutional inflows indicates that hedging demand remains intact.”
Such activity suggests that investors are cautious amid global risks, even as markets await clearer policy signals.
Interest Rates Remain a Key Constraint
Despite robust demand, analysts note that interest rate trends remain the primary factor limiting a sharper gold rally.
Gold Faces Consolidation Amid Inflation and Rate Uncertainty
Linh Tran noted that US inflation remains above the Federal Reserve’s target, complicating prospects for near-term monetary easing. “Gold may struggle to stage a strong breakout in the short term, even though safe-haven demand persists,” she said.
Market participants are closely monitoring US economic data and central bank guidance, as potential rate cuts could have a significant impact on gold’s next move. Looking ahead, analysts expect the metal to remain sensitive to geopolitical developments and shifts in monetary policy.
Tran added that the most likely near-term scenario is consolidation rather than a decisive surge. “In my view, gold is more likely to consolidate below the $5,200 per ounce level rather than forming a strong upward trend in the immediate term,” she explained.
Even so, strong institutional demand indicates that any short-term dips are likely temporary repositioning rather than a reversal of the broader upward trend.
