By: Middle east economy

Gold prices surged to an unprecedented peak on Tuesday, marking a sixth consecutive session of gains, driven by a weaker dollar and increasing expectations of a U.S. interest rate reduction this month.

In Dubai, gold rates witnessed a modest increase compared to the previous day. The price of 24-carat gold rose by AED1.86, reaching AED420.66 per gram. Similarly, 22-carat gold increased by AED1.71 to AED383.90 per gram, while 21-carat gold saw an increase of AED1.63, now priced at AED368.08 per gram. Lastly, 18-carat gold went up by AED1.40, bringing the price to AED315.50 per gram. This trend reflects a consistent upward movement in the local market, influenced by fluctuations in global gold prices.

Spot gold rose by 0.48 percent to $3,494.3 per ounce, after reaching a historic high of $3,508.50 earlier in the session. U.S. gold futures for December delivery increased by 0.50 percent to $3,563.47. Trump has been vocal in his criticism of the Federal Reserve and its chair, Jerome Powell, for several months due to their reluctance to lower rates, and he recently targeted Powell regarding an expensive renovation of the central bank’s Washington headquarters.

On Monday, Treasury Secretary Scott Bessent remarked that while the Fed is and should maintain its independence, it has “made a lot of mistakes” and defended Trump’s authority to dismiss Fed Governor Lisa Cook over allegations of mortgage fraud. Traders are currently anticipating a 90 percent likelihood of a 25-basis-point Fed rate cut on September 17, according to the CME FedWatch tool.

Read more: Dubai 24-carat gold price today rises to AED419, global rates gain as weak job data fuels Fed rate cut expectations

Anticipation of payrolls report

Non-yielding gold generally thrives in a low-interest-rate landscape. Expectations for a rate cut and concerns regarding the Fed’s autonomy have exerted pressure on the U.S. dollar, which is hovering near a more than one-month low against its competitors, rendering gold more affordable for international buyers.

Data released on Friday indicated that the U.S. personal consumption expenditures price index increased by 0.2 percent month-on-month and 2.6 percent year-on-year, both of which align with forecasts. Investors are now keenly awaiting the U.S. non-farm payrolls data set to be released on Friday to assess the magnitude of the anticipated Fed rate cut later this month.

In other markets, spot silver advanced by 0.1 percent to $40.71 per ounce, following its peak since September 2011 in the previous session. Platinum rose by 1 percent to $1,415.70, while palladium experienced a decline of 0.7 percent to $1,129.03.

Gold price surge

Gold prices have surged by over 40 percent compared to the previous year, demonstrating sustained robust demand amid global economic uncertainties and geopolitical tensions. Central banks have increased gold purchases, further underpinning its appeal as a safe-haven asset. The U.S. dollar’s depreciation by approximately 2.2 percent over the past month has enhanced gold’s attractiveness for international investors. Analysts predict gold could reach $3,700 per ounce in the near future, driven by monetary policy shifts and inflation concerns.

Federal Reserve Chair Jerome Powell recently signaled a cautious approach towards a potential rate cut, highlighting rising risks to the labor market while acknowledging persistent inflationary pressures. This nuanced stance has prompted Wall Street analysts to revise forecasts, now anticipating two or three rate cuts by the end of 2025, improving liquidity conditions that typically benefit non-yielding assets like gold and silver.

Technical analysis of gold trends

Vijay Valecha, chief investment officer, Century Financial, remarked to Economy Middle East, “Following a 0.84 percent increase yesterday, gold reached a record high of $3,508.90 in early trading today, as expectations of Federal Reserve rate cuts and rising concerns over the central bank’s independence fueled the multi-year rally in precious metals. ETFs added 104,284 ounces of gold to their holdings in the last trading session, bringing this year’s net purchases to 10 million ounces, marking the seventh consecutive day of growth. The rally also reflects a softer dollar and strong demand from central banks as investors rotate out of U.S. Treasuries.

“Further, the investors will be closely watching the NFP data due this Friday and the court ruling on whether Trump has legitimate grounds to remove Fed Governor Lisa Cook from the central bank. A weaker NFP print and the removal of the Fed governor will likely send the precious metal higher,” he further noted.

“Technically, gold has broken out of a three-month consolidation range, reaching an intraday peak of $ 3,508.9 and surpassing the $ 3,500 mark last seen in April. It remains above the 9 and 21-day SMA levels of $3,410.50 and $3,378.82, indicating short-term bullish momentum. On the 4-hour timeframe, a close above $3500, which is a key resistance, would confirm further gains and potentially push prices toward $3550. If not, support is likely around $ 3,470, then $3,450,” Valecha added.

Fed’s cautious stance

The U.S. non-farm payrolls report for July 2025, released earlier, showed an increase of 73,000 jobs, falling short of the anticipated 110,000, with a steady unemployment rate of 4.2 percent. This softer labor market data aligns with expectations of a modest Fed rate cut in September to support growth without spurring inflation, as reflected in forecasts from institutions like Citi.

Silver has mirrored gold’s strength, rising over 45 percent year-on-year, bolstered by industrial demand and investor interest in precious metals amid market volatility. Platinum briefly reached $1,415.70, supported by automotive sector recovery, while palladium faces downward pressure with forecasts indicating potential price moderation through late 2025.