Gold rose to an all-time high of $3,051.96 on Wednesday night driven by the US Federal Reserve’s decision to hold interest rates unchanged for a second straight meeting and its projection of slower growth and higher inflation.
The precious metal was trading at $3,039.49 at 12.31pm UAE time on Thursday.
Bullion has climbed 16 per cent this year, extending last year’s strong performance. Investors usually flock to the yellow metal for a safe haven amid a gloomy outlook for both the US and global economy.
“While the market has drifted into technical overbought territory, we think the prevailing mood among investors remains cautious, which is likely to support the appetite for gold,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
“Gold remains a key portfolio hedge against near-term uncertainty, but also against episodic bouts of risk aversion further out.”
Fed chairman Jerome Powell acknowledged during a press conference on Wednesday the high degree of uncertainty from US President Donald Trump’s policy changes, though repeating that the central bank is not in a hurry to adjust borrowing costs.
The Federal Open Market Committee voted to keep the benchmark federal funds rate in a range of 4.25 per cent to 4.5 per cent.
The dollar and Treasury yields pushed lower after the FOMC rate decision. That helped lift bullion by as much as 0.6 per cent to a record $3,051.96, surpassing the previous peak hit on March 18.
The decision to hold rates steady comes as Mr Trump’s aggressive trade policies have placed the US economy under increasing pressure. His plans to levy tariffs on US trading partners have increased fears of an economic slowdown and caused a risk-off sentiment.
Continuing tension in the Middle East, as well as hostilities between Russia and Ukraine, have also led to a flight to safety.
Bullion typically performs well in an environment of geopolitical tension and tariff uncertainty.
The UAE is known as the “City of Gold” as it is a major re-export and trading hub for the precious metal, said Vijay Valecha, chief investment officer at Century Financial.
"Gold prices in the UAE have risen by nearly Dh20 in a matter of just 20 days. The price of 24 carat gold per gram surged to Dh367.50, while that of 22 carat per gram and 18 carat per gram rose to Dh340.25 and Dh326.25, respectively. UAE residents are increasingly viewing gold as a hedge against inflation and economic uncertainty," he said.
The imminent arrival of major festivals like Eid Al Fitr and Akshaya Trithiya are contributing to an increase in demand for gold jewelry. Akshaya Trithiya is traditionally among the busiest and most lucrative days for gold purchases in the UAE’s retail sector, according to Mr Valecha.
Although high prices could deter buyers on a tight budget, major gold shops are offering "compelling promotions" – including discounts on making charges, raffles and free gold coins on purchases above a given threshold – to entice buyers. Some have even pre-booked gold ornaments as they expect the rally to continue. This has enabled them to lock in a lower price as the rally gains momentum, he added.
"Several jewelry retailers have observed a growing trend of customers returning to exchange gold items purchased just three months ago. With gold prices having increased by over $400 per ounce over this period, consumers are seizing the opportunity to enhance or upgrade their holdings," Mr Valecha said.
The last time gold crossed a “thousand-dollar” threshold was when it broke through the $2,000 per ounce mark in August 2020 amid uncertainty surrounding the Covid-19 pandemic, wealth manager UBS said in a note on Wednesday.
With the $3,000 per ounce milestone reached, investors may be uncertain if gold’s appeal can extend further. However, geopolitical flashpoints, prospects of a faster pace of rate cuts from the Fed and gold inflows into exchange-traded funds (ETFs) are supporting bullion prices.
UBS retained its bullish stance on gold and revised up its target to $3,200 per ounce by June and through March 2026.
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
RESULTS
6.30pm: Maiden (TB) Dh 82,500 (Dirt) 1.600m
Winner: Miller’s House, Richard Mullen (jockey), Satish Seemar (trainer).
7.05pm: Maiden (TB) Dh 82,500 (D) 2,000m
Winner: Kanood, Adrie de Vries, Fawzi Nass.
7.50pm: Handicap (TB) Dh 82,500 (D) 1,600m
Winner: Gervais, Sandro Paiva, Ali Rashid Al Raihe.
8.15pm: The Garhoud Sprint Listed (TB) Dh 132,500 (D) 1,200m
Winner: Important Mission, Royston Ffrench, Salem bin Ghadayer.
8.50pm: The Entisar Listed (TB) Dh 132,500 (D) 2,000m
Winner: Firnas, Xavier Ziani, Salem bin Ghadayer.
9.25pm: Conditions (TB) Dh 120,000 (D) 1,400m
Winner: Zhou Storm, Connor Beasley, Ali Rashid Al Raihe.
'The Woman in the House Across the Street from the Girl in the Window'
Director:Michael Lehmann
Stars:Kristen Bell
Rating: 1/5
The specs
Price, base / as tested Dh135,000
Engine 1.6L turbo
Gearbox Six speed automatic with manual and sports mode
Power 165hp @ 6,000rpm
Torque 240Nm @ 1,400rpm 0-100kph: 9.2 seconds
Top speed 420 kph (governed)
Fuel economy, combined 35.2L / 100km (est)
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Newcastle 2-2 Manchester City
Burnley 0-2 Crystal Palace
Chelsea 0-1 West Ham
Liverpool 2-1 Brighton
Tottenham 3-2 Bournemouth
Southampton v Watford (late)
RESULTS
Manchester United 2
Anthony Martial 30'
Scott McTominay 90 6'
Manchester City 0
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
MATCH INFO
Scotland 59 (Tries: Hastings (2), G Horne (3), Turner, Seymour, Barclay, Kinghorn, McInally; Cons: Hastings 8)
Russia 0
If you go
The flights
Emirates (www.emirates.com) and Etihad (www.etihad.com) both fly direct to Bengaluru, with return fares from Dh 1240. From Bengaluru airport, Coorg is a five-hour drive by car.
The hotels
The Tamara (www.thetamara.com) is located inside a working coffee plantation and offers individual villas with sprawling views of the hills (tariff from Dh1,300, including taxes and breakfast).
When to go
Coorg is an all-year destination, with the peak season for travel extending from the cooler months between October and March.
