Dubai Gold Prices Climb Amid U.S. Tariff Fears

Gold Price Surge in Dubai Amid U.S. Tariff Warnings

The price of gold has significantly risen in Dubai after the United States put forth a proposal to introduce new tariffs on its trading partners. By Thursday morning, the price of gold increased by 2.5 dirhams per gram, pushing the cost of 24-karat gold over the psychological barrier of 400 dirhams, rising to 400.25 dirhams.

The price for 22-karat gold stood at 370.75 dirhams, 21-karat at 355.5 dirhams, and 18-karat at 304.5 dirhams in the morning. Globally, the spot price of gold was at 3,323.59 dollars per ounce, marking a 0.33 percent increase in just one day.

What is driving the gold price increase?

The tense atmosphere of global gold markets has been triggered by a re-escalation of trade tensions. The United States announced it might impose tariffs of up to 25 percent on imports from Japan and South Korea, and between 25-40 percent tariffs on products from other typically Asian and South African countries. Moreover, a 50 percent tariff was declared for U.S. copper imports and goods arriving from Brazil, set to take effect on August 1.

Though details of these decisions remain unclear, financial market participants anticipate more sector-specific tariffs, further heightening uncertainty in global markets. Historically, this type of instability strengthens the appeal of gold as a safe-haven asset, resulting in price hikes.

What could this mean for investors and buyers?

Dubai's gold market has long been a popular destination for investors and visitors, thanks to low tax rates and a wide array of choices. However, the price increase might briefly deter buyers, especially those looking to purchase gold as jewelry. Conversely, for those investing in gold, the rising trend could serve as an incentive.

Experts suggest that the current tariff measures are likely to increase the effective tariff burden on the American economy, but may not necessarily lead to a global recession. The adaptive capabilities of the world economy, along with the stability of American consumer demand, may continue to offset negative impacts.

Summary

The surge in demand for gold and the resulting price increase are closely linked to international socio-economic events. The recent price hike in Dubai exemplifies how local markets react to global tensions. Those considering buying gold should keep an eye on international events, as they can directly affect prices—even within a matter of days.

(Source of the article: Based on Forex.)