By: Economy Middle east

Gold prices surged to new record highs on Tuesday, crossing the $4,100 mark per troy ounce amid escalating expectations of U.S. Federal Reserve interest rate cuts and renewed geopolitical uncertainties, notably the intensifying trade tensions between the United States and China. The precious metal’s rally is underpinned by its expanding role as a safe-haven asset amidst a backdrop of macroeconomic volatility and shifting investment patterns.

On Tuesday, gold rates in Dubai saw a notable increase. The price of 24-carat gold rose by AED9.25, reaching AED502.50. Similarly, 22-carat gold climbed AED8.50 to AED456.75. Additionally, 21-carat gold saw a rise of AED8.00, bringing its price to AED446.00, while 18-carat gold gained AED6.75, now valued at AED382.25.

Globally, gold futures for December delivery surged by more than 3 percent on October 13 and further extended gains on Tuesday, with spot gold prices climbing 0.42 percent to reach over $4,129 per troy ounce, marking an increase of over 56 percent year-to-date. U.S. gold futures for December delivery edged up by 1.34 percent, closing at over $4,136.60. The rally represents a sustained momentum that has persisted over eight consecutive weeks of gains, consolidating gold’s position as a top-performing commodity in 2025.

Alongside gold, silver also witnessed significant upside movement, hitting all-time highs with prices rising by 1.68 percent to around $52.71 per troy ounce. Silver’s appreciation reflects similar investor sentiment, driven by its dual role as both an industrial metal and a store of value.

U.S. Fed rate cut expectations

Central to the bullish gold momentum are market anticipations that the U.S. Federal Reserve will implement further interest rate cuts before the end of the year. Investors are positioning ahead of anticipated monetary easing as inflation remains elevated globally but economic growth shows signs of slowing. The prospect of lower interest rates diminishes the opportunity cost of holding non-yielding assets like gold, thereby enhancing its attractiveness. Federal Reserve Chair Jerome Powell’s upcoming speeches and policy signals continue to be closely watched, with analysts highlighting that further rate cuts could provide additional fuel for gold’s upward trajectory.

The recent resurgence of trade tensions between the U.S. and China has intensified safe-haven demand. Following announcements of new U.S. tariffs on Chinese goods and export restrictions on critical technologies, markets have displayed increased risk aversion. China’s response, while restrained in retaliatory tariffs, has included restrictions on rare earth materials exports—key to global technology supply chains—which exacerbates concerns around sustained trade conflict. This geopolitical friction has injected uncertainty into global economic prospects, prompting investors to seek refuge in gold and silver. The renewed trade issues have interrupted a brief easing of geopolitical risk sentiment, ultimately supporting commodity prices.

Diversification and ETF inflows

Significant inflows into gold-backed exchange-traded funds (ETFs) have further supported the rally. Institutional and central bank buyers are diversifying their reserves, moving away from U.S. Treasuries—at their lowest foreign holdings since 2013—toward gold as a store of value amid a weakening dollar. This trend reflects confidence in gold as a hedge against currency depreciation and economic uncertainties

In India, which has one of the largest consumer bases for gold, domestic prices have mirrored the global surge, with 24-carat gold rates reaching approximately INR125,410 per 10 grams in Mumbai, representing a steady upward trajectory fueled by global prices and heightened festival demand. The rise in physical gold prices was echoed in markets across Asia, including Indonesia, where Antam gold prices hit record levels with the selling price of one gram reaching IDR2,360,000 (Indonesian Rupiah), reflecting a 5.5 percent gain since early October. In Dubai, local gold prices, when converted to Indian Rupees, showed a pricing advantage over the Indian domestic market amid currency dynamics, underscoring the regional interconnectedness and flow of gold trading in the Gulf and South Asian markets.

Analysts remain cautiously optimistic about gold’s near to medium-term prospects. While the risks of price correction are present due to the sharp rally, the underlying drivers—monetary easing, geopolitical tensions, and diversification flows—are expected to sustain support for the metal. Gold prices are forecasted to continue trading above historic levels, with expectations of potential movement toward $4,200 to $4,250 within the next 12 months. Experts like Praveen Singh from Mirae Asset Sharekhan emphasize monitoring critical price levels and central bank moves globally to gauge the trajectory. The metal’s recent bullish streak, coupled with key macroeconomic developments, suggests a transformative period for gold markets this year.