The 24K gold variant surged by Dh21.75 in a single day, trading at Dh514 per gram on Thursday morning, compared with Dh492.25 at the market opening on Wednesday.
Dubai gold prices crossed the Dh500 mark for the first time in more than a month, amid renewed market attention over the possible reopening of the Strait of Hormuz.
The 24K gold category climbed Dh21.75 in a single day, trading at Dh514 per gram on Thursday morning, compared with Dh492.25 at the market opening on Wednesday.
Other gold categories also recorded gains, with 22K trading at Dh475.75 per gram, 21K at Dh456, 18K at Dh391, and 14K at Dh305.
The spot gold price was trading at $4,260.43 per ounce, marking a 0.37% increase. Silver prices remained largely stable, edging up 0.1% to $62.08 per ounce.
Analysts said market sentiment was supported by reports that the US, Iran and Oman were moving closer to an interim agreement aimed at restoring normal shipping activity through the Strait of Hormuz.
The possibility of a deal has also helped ease inflation concerns and lowered expectations of further Federal Reserve rate increases, according to Vijay Valecha, CIO of Century Financial.
“The potential easing of geopolitical tensions has prompted investors to reduce expectations for additional rate hikes, with markets now pricing in only one Fed rate increase by the end of the year, compared with two expected just a week earlier,” Valecha said. “Lower interest-rate expectations are generally positive for non-yielding assets such as gold.”
Gold’s recent gains have also been supported by expectations of fewer US rate increases and renewed demand from Chinese gold-backed exchange-traded funds (ETFs).
“Additional support for bullion continues to come from China, where gold-backed ETFs recorded a 14-day streak of inflows, the longest since March. The renewed institutional demand points to improving investor sentiment in the world’s largest bullion market and has helped keep prices above the psychologically important $4,000 per ounce level,” Valecha said.
