While gold stole the spotlight with its record-breaking rally in prices, other precious metals also experienced gains
Gold prices in the UAE surged to unprecedented levels on Wednesday, marking a record-breaking streak as investors globally sought refuge amid mounting inflation concerns and geopolitical tensions.
Twenty-four-carat gold climbed to AED276.50, while 22-carat gold stood at AED256. Eighteen-carat gold also rose to AED212.5.
Globally, spot gold saw a 0.06 percent increase to $2,282 per ounce, as of 5:16 GMT, and hit a record high of $2,288.09 earlier in the session. Meanwhile, U.S. gold futures gained 0.9 percent to $2,302.25.
Hedging against uncertainty
Analysts attribute the surge in gold prices to its traditional role as a hedge against inflation and a safe haven asset during periods of economic and political uncertainty. They also highlighted that the ongoing conflict between Ukraine and Russia, particularly attacks on oil infrastructure, has fueled safe-haven flows into gold, overshadowing concerns over rising U.S. Treasury yields and doubts surrounding a potential interest rate cut by the Federal Reserve.
Federal Reserve policymakers signaled on Tuesday their openness to potentially cutting U.S. interest rates three times this year. However, stronger-than-expected economic data, including an unexpected rebound in U.S. manufacturing, has raised doubts among investors about the likelihood of such cuts. Despite this, gold’s appeal as an inflation hedge remains robust.
The surge in gold prices, which has exceeded 10.8 percent since the beginning of the year, is driven not only by concerns of inflation but also by speculative trading activity. Analysts also noted speculators, hedge funds, and commodity funds responding to quantitative signals drive momentum in gold trading.
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Other precious metals
While gold stole the spotlight with its record-breaking rally in prices, other precious metals also experienced gains. Spot silver rose by 1.2 percent to $26.41 per ounce, platinum gained 0.8 percent to $925.72, and palladium edged up 0.6 percent to $1,009.45. However, analysts noted that gold’s remarkable rally has not translated into increased enthusiasm for platinum jewelry in Asia, indicating diverging trends within the precious metals market.
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