UAE: Gold surged to an all-time high, crossing $3,400 an ounce, driven by a sharp decline in the US dollar and heightened investor demand for safe-haven assets. The bullion market reacted strongly to renewed economic uncertainty and concerns over inflation, prompting investors to pour into gold as a hedge. Analysts cited weakening US economic indicators and geopolitical tensions as key factors behind the precious metal’s meteoric rise.
The US dollar, meanwhile, fell to its lowest level since early 2024, contributing to gold’s rally. A weaker dollar makes gold cheaper for holders of other currencies, boosting global demand. The greenback’s drop was attributed to recent Federal Reserve signals suggesting a prolonged pause in interest rate hikes, which dimmed the dollar’s appeal compared to hard assets like gold.
Global markets have responded with volatility, as investors shift away from equities and bonds towards commodities. Gold’s performance is being closely watched by traders who see it as a barometer of broader economic sentiment. Some are warning of potential overheating in the bullion market, while others believe the momentum may continue if the dollar stays weak.
The record high underscores growing concerns among investors about the stability of traditional financial instruments. As central banks around the world continue to face challenges balancing growth and inflation, many are increasing their gold reserves. This historic price surge may mark a longer-term shift in investment strategies globally.
