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Gold Prices Surge in the UAE Amid Ongoing Middle East Crisis

The ongoing Middle East crisis drove up gold prices in the UAE as markets opened on Wednesday.

Gold prices in the UAE surged as markets opened on Wednesday, driven by the persisting Middle East crisis and the increased demand for safe-haven assets.

 Dubai Jewellery Group’s Data:

According to data from the Dubai Jewellery Group, 24K gold was trading at Dh238.75 per gram on Wednesday morning, marking a significant increase from Dh238.0 at the close of markets on Tuesday. Other variants of gold also witnessed higher opening prices.

Variants of Gold Prices:

  • 22K gold was trading at Dh221.25 per gram.
  • 21K gold was priced at Dh214.0 per gram.
  • 18K gold was valued at Dh183.5 per gram at 9 a.m. UAE time on Wednesday.

 Global Spot Gold Market:

On the global stage, spot gold gained 0.3 percent, reaching $1,975.61 per ounce. Softer US Treasury yields drove this increase, although the precious metal showed signs of fatigue regarding its safe-haven demand.

Previous Decline and Market Analysis:

Gold had experienced a decline in the two preceding sessions and was trading below the five-month highs achieved the previous week. 

Analysts, such as Alex Kuptsikevich, a senior market analyst at FxPro, attributed this decline to profit-taking following a significant rally prompted by the Middle East tensions.

Analyst’s Perspective:

According to Alex Kuptsikevich, gold’s cost per troy ounce had briefly reached $1,955 during the peak of the European session on Tuesday. 

This followed a two-week rally, starting from $1,811 and nearly hitting $2,000 since October 6. He noted that this week’s market opening with a gap down signified substantial profit-taking demand, although the gap was closed during the day.

Future Outlook for Gold:

Kuptsikevich suggested a more bullish scenario for gold. 

He stated that despite the common belief that rising government bond yields are bearish for gold, it’s unlikely that significant capital would flow into a declining market. 

Signs of a bottom forming could trigger a shift in the prevailing trade, leading to a flow of capital out of gold and into bonds.

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