Gold prices in Dubai surged to fresh record highs on Monday as global bullion markets reacted to growing uncertainty surrounding a potential US government shutdown and looming Federal Reserve rate cuts.
In the local market, 22-karat gold was priced at Dh437.25 per gram, while 24-karat touched Dh472.25 per gram, setting new benchmarks for the UAE’s bullion trade. The global gold rate briefly surpassed $3,920.63 an ounce before settling near $3,905.54, marking one of the strongest sessions in recent months.
Across South Asia, India’s 24-karat gold rate climbed to ₹11,940 per gram, and 22-karat reached ₹10,945, reflecting the ripple effect of international market dynamics on regional pricing.
The surge follows heightened anxiety in financial markets as Washington grapples with a political deadlock that has delayed key economic data releases, including the crucial US payroll report. The uncertainty has amplified volatility, leaving traders increasingly convinced that the Federal Reserve will opt for a quarter-point rate cut by the end of the month, a policy move typically favourable for non-yielding assets like gold.
Gold’s rise in 2025 has been nothing short of remarkable, gaining nearly 50% year-to-date. Analysts attribute this climb to sustained geopolitical tensions, central bank diversification away from dollar assets, and expectations of monetary easing in major economies.
Major institutions such as Goldman Sachs and HSBC anticipate that gold could soon test the $4,000 mark if the current momentum continues. “The metal’s rally is being driven by a perfect mix of risk aversion, policy uncertainty, and official sector demand,” one analyst noted.
Within Dubai’s bustling gold souks and malls, jewellers report a noticeable slowdown in retail demand as prices remain steep. Buyers are adopting a wait-and-watch approach, hoping for temporary corrections, though many remain convinced that prices could climb further should the US fiscal impasse persist.
Despite the short-term caution, long-term sentiment among traders remains bullish, with several predicting sustained interest from both investors and central banks amid an increasingly unstable global economic outlook.
