Gold, a traditional safe-haven asset, has been experiencing price fluctuations in Dubai, a key market in the region. After reaching levels close to 300 dirhams per gram on Tuesday, the price of gold recorded a slight decrease at the opening of the markets on Wednesday, with a drop of 1.5 dirhams per gram.
This movement in the price of gold in Dubai occurs in a global context marked by various variables that influence market dynamics. Factors such as the monetary policy of major economies, the geopolitical situation, and the demand for the precious metal, among others, directly impact the price of gold.
Impact of Global Monetary Policy on Gold Prices
Monetary policy of central banks is a determining factor in the price of gold. The injection of liquidity into the economy, such as the measures being considered by the People’s Bank of China, can have a positive impact on the price of gold by increasing the demand for the precious metal as a store of value.
In the past, China has increased liquidity in the month of August for several consecutive years. However, in 2023, it is speculated that the People’s Bank of China might delay these measures until the United States Federal Reserve lowers interest rates, something expected to happen on September 18. This possible cut in interest rates could increase global liquidity and thus boost the price of gold.
Geopolitical Events and Their Influence on the Gold Market
The international geopolitical situation also plays a fundamental role in the evolution of the price of gold. War conflicts, geopolitical tensions, and global economic uncertainty can create greater demand for gold as a safe-haven asset, which can translate into a price increase.
In this context, the current global geopolitical situation, with ongoing conflicts and tensions among major powers, may be contributing to the volatility of the gold price.
The Demand for Gold in Dubai and its Influence on the Price
The demand for gold in Dubai is also a key factor in determining the price of the precious metal in the emirate. Dubai has become a major trading hub for gold, with a large number of jewelry stores, investors, and traders demanding the precious metal.
The demand for gold in Dubai is driven by various factors, such as the demand for jewelry, investment in gold as a safe-haven asset, and the use of gold in the technology industry. The strong demand for gold in Dubai can contribute to maintaining a high price of the precious metal in the emirate.
