Gold prices in Dubai surged on Tuesday, hitting a new all-time high as 24K gold jumped Dh5.25 per gram to Dh466, compared to Dh460.75 at Monday’s close.

22K gold also rose Dh4.5 per gram to Dh431.25, while 21K and 18K opened at Dh413.75 and Dh354.5 per gram, respectively.

Spot gold traded at $3,864.39 per ounce, marking nearly a 1% increase. Analysts attribute the rally to growing concerns over a potential US government shutdown and expectations of further US interest rate cuts.

Ahmad Assiri, market strategist at Pepperstone, explained that if Congress fails to pass a last-minute funding bill, non-essential agencies could close, disrupting public services and official economic data releases. “Investors are concerned about the blackout of key economic data that guides both policymakers and markets,” he said.

Historical context and demand

Assiri referenced previous US shutdowns, including the 16-day 2013 shutdown over the Affordable Care Act and the record 35-day 2018-2019 shutdown, noting how prolonged deadlock can negatively impact growth, with estimated GDP losses of around $11 billion during the 2018-2019 closure.

He added that gold’s surge is supported not just by speculative flows but also by structural demand. “Selling gold at this juncture is proving costly, with profit-taking swiftly absorbed by demand. Short-term fatigue may emerge, but the ceiling on further gains appears fragile, reinforcing gold’s position,” Assiri said.