Gold prices hit a new high in Dubai trading on Wednesday, jumping more than 1% to reach a record high of $2,288 an ounce.
In the UAE, the 24-carat gold price rose to 276.5 dirhams per gram ($75.29) from 274.5 dirhams ($74.74) per gram at market close on Tuesday, adding 2 dirhams per gram (54 cents). Prices for 22 carat, 21 carat and 18 carat gold rose similarly, trading at AED 256.0 ($69.71), AED 247.75 ($67.46) and AED 212.5 ($57.86) per gram respectively.
Globally, the spot gold price rose 0.07% to $2,281.8 per ounce. Earlier that day, it jumped more than 1% to hit a record high of $2,288 an ounce. According to experts, the price of the precious metal is growing due to concerns of rising inflation.
In March, gold prices rose by an average of 9%.
Analysts predict that gold prices may be prone to a short-term correction as traders try to consolidate their profits after the March surge, but in the long term they will continue to rise. Recently, gold prices have been largely driven by expectations of the US Federal Reserve's decision to cut interest rates.
“Strong price increases are often followed by corrections, which can push prices lower for a period of time before bouncing back if conditions remain favourable,” said George Pavel, general manager at Capex.com Middle East. At the same time, he said, traders may continue to react to new economic data and comments from central banks as they revise their monetary policy expectations, which could fuel some risks and volatility in gold prices. Currently, traders may view the market as overbought, he added.
Helene Tarin for Rough&Polished
