Dh500 a gram? Gold rally puts it closer to milestone never reached

AS BULLION NEARS $4,000, EXPERT SUGGESTS DIPS MAY BE BUYING WINDOWS

- BY NIVETHA DAYANAND Assistant Business Editor

Gold prices in Dubai are edging closer to a landmark Dh500 per gram for 24-carat, a level that would mark a new era for the city's bullion trade. The metal reached a record high of nearly Dh479 per gram, as of 07:00 GST yesterday, fuelled by a surge in global prices past $3,900 an ounce and persistent demand for safe-haven assets.

Dollar impact

Daniel Takieddine, cofounder and chief executive of Sky Links Capital Group, says a move to Dh500 would need another 9-10 per cent increase in the local price. "Given the UAE dirham's peg to the US dollar, this would imply an international gold price well above $4,200 per ounce, given that gold is currently trading at around $3,900 per ounce," he says.

"For gold to break through $4,000, investors are waiting for clearer signals of interest rate cuts by the Federal Reserve and continued purchases by central banks and funds. A weaker dollar and new geopolitical shocks would also increase demand. If these conditions are confirmed, retail prices in the UAE are likely to follow suit."

Rupee impact