Dubai Gold Prices Soar to 3-Month High

Gold prices in Dubai have reached a 90-day high, crossing Dh550 per gram over the weekend. The 24K gold price has risen approximately Dh70 per gram in August so far.

Naeem Aslam, CIO at Zaye Capital Markets, attributes this rise to a combination of lower Treasury yields, US dollar weakness, and persistent policy uncertainty.

Aslam notes that the trade-policy pause may remove part of the immediate haven bid, but elevated fiscal concerns, Middle East uncertainty, and questions over the direction of US monetary policy continue to provide competing sources of support for gold prices.

Samer Hasn, senior market analyst at xs.com, also attributes gold's recovery to a shift from high-yield US Treasury bonds toward alternative assets amid uncertainty clouding the fixed income market. He notes that inflows toward physical gold exchange-traded funds have contributed to feeding the upward trend, including $2 billion by SPDR Gold Shares (GLD).

However, Hasn warns that Middle East risks cut both ways and could involve reimposing limits on capital flow toward gold due to inflation risks and high bond yields.