UAE Gold Rises Dh11 a Gram as US Midterm Results Weaken the Dollar

The 24-carat rate went up Dh11, or 2.3 per cent, to Dh484 a gram from Dh473 on Tuesday. The 22-carat rate gained Dh10.25 to Dh448.25, 18-carat climbed Dh8.75 to Dh368.50 and 14-carat added Dh6.50 to Dh287.25, according to the report.

Globally, gold rose 2.42 per cent to above $4,025 an ounce. Citing Bloomberg, Gulf News said early counting showed the Democrats ahead in the races for both the Senate and the House of Representatives. Investors took this to mean a smaller chance that President Donald Trump would pursue a deficit-expanding agenda over the next two years.

Why Gold Moved

Treasury yields fell across the curve and a dollar index fell by as much as 0.4 per cent, its largest drop in two months. Gold pays no interest, so lower yields make it more attractive, and a weaker dollar makes it cheaper for most buyers.

Chris Weston, head of research at Pepperstone, said in comments quoted by Gulf News that "a weaker USD, falling real yields and demand for protection" against a potentially more unpredictable and confrontational Trump administration made a strong case for buying gold.

The metal has also moved this week on mixed signals from US-Iran diplomacy. A diplomat told Bloomberg that Tehran and Washington are reviewing new proposals from mediators aimed at avoiding a return to all-out war, while limited US airstrikes were reported to have hit targets on Iran's Qeshm island in the Strait of Hormuz the previous night.

Oil and Rates Remain the Swing Factors

Oil prices rose over the past month on regional tensions, then fell back sharply this week on signs the White House will give diplomacy more time. In recent weeks gold and crude have mostly moved in opposite directions, because high energy prices feed expectations of tighter monetary policy.

Tony Sage, chief executive of Critical Metals, told Gulf News that stronger inflation signals or higher crude prices could push yields up and weigh on gold. He said softer guidance from the Federal Reserve or de-escalation in the Middle East that lowers oil prices could help the metal stabilise and allow central-bank buying to drive a recovery.

For UAE households and jewellery retailers, the jump adds to what gold already costs ahead of the Diwali buying season. For investors in the region, it shows how quickly US election results are feeding into local asset prices, alongside the moves in technology stocks this week.