By: Economy Middle east

Gold prices extended their sharp rally on Thursday, climbing to a fresh record just below $5,600 an ounce, as investors flocked to safe-haven assets amid mounting geopolitical and economic uncertainty. Silver also surged, almost reaching the $120 mark.

Spot gold jumped 2.22 percent to $5,537.66 an ounce by 5:29 GMT, after touching a record high of $5,591.61 earlier in the session.

In the UAE, gold rates surged, with 24-carat gold rising AED26.75 to AED666 and 22-carat gold edging up AED25 to AED616.75. Additionally, 21-carat gold increased by AED23.75 to AED591.25, while 18-carat gold added AED20.25 to reach AED506.75.

Meanwhile, 14-carat gold gained AED15.75 to AED395.25.

Gold surges more than 27 percent so far this year

The precious metal surged above the $5,000 level for the first time on Monday and has climbed more than 10 percent so far this week, propelled by a mix of strong safe-haven demand, robust central bank purchases and a softer U.S. dollar. Gold has risen more than 27 percent so far this year, building on a sharp 64 percent surge in 2025.

The latest surge in gold prices was largely driven by U.S. President Donald Trump’s comments on Wednesday, where he called on Iran to return to negotiations and reach a nuclear deal, warning that any future U.S. military action would be far more forceful than last year’s strikes on Iranian nuclear facilities.

Tehran responded by threatening retaliation against the United States, Israel and their allies.

“Ongoing geopolitical uncertainty, a weaker dollar and policy risks are driving demand for safe-haven assets. So far this year, gold is up over 27 percent, helped by a steep drop in the U.S. dollar, which fell near four-year lows due to concerns about policy credibility and the future of U.S. monetary leadership,” said Vijay Valecha, Chief Investment Officer, Century Financial.

Federal Reserve leaves interest rates unchanged

Meanwhile, the Federal Reserve left interest rates unchanged on Wednesday, in line with expectations, with Chair Jerome Powell noting that inflation in December was still likely well above the central bank’s 2 percent target.

Gold prices also found support on Thursday from plans by a crypto group to allocate 10–15 percent of its investment portfolio to physical bullion.

“Geopolitical risks remain high, with new trade tensions between the U.S., NATO allies and Canada, stalled Russia-Ukraine peace talks and ongoing tariff uncertainty. These issues have strengthened gold’s appeal as a hedge against economic shocks, bond market swings and inflation. Meanwhile, U.S. consumer confidence has dropped to its lowest level in years, increasing concerns about the economy,” added Valecha.

Silver surges to record high of $119.34

As gold prices surged, spot silver rose 4.26 percent to $118.26 an ounce after touching a record high of $119.34 earlier in the session. The metal has been buoyed by investor demand for lower-priced alternatives to gold, alongside supply constraints and momentum buying, and is up more than 60 percent so far this year.

“Silver has surged by over 60 percent in January alone, reaching record highs of $119.34. For silver, the next resistance is likely near $120, with support around $110,” added Valecha.

In other precious metals, spot platinum climbed 3.12 percent to $2,780.50 an ounce, after reaching a record high of $2,918.80 on Monday, while palladium gained 1.39 percent to $2,102.75.