Gold prices rose in the United Arab Emirates on Friday, according to data collected by FXSTERET.
The price of gold stood at 391.35 Dirhams of the United Arab Emirates (AED) per gram, an increase compared to the 389.12 aed that cost Thursday.
The price of gold increased to 4,564.60 AED per Tola from 4,538.64 AED per tola from the previous day.
| Unit of measure | Gold price in AED |
|---|---|
| 1 gram | 391.35 |
| 10 grams | 3,913,48 |
| Tola | 4,564.60 |
| Troy ounce | 12,171.90 |
What moves the market today: the price of gold receives support for the purchase of sustained safe refuge and a weaker USD
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The US House of Representatives, controlled by the Republicans, approved on Thursday the broad Tax and Expenses Law of President Donald Trump. The bill, called “great and beautiful project”, which will add around 3.8 billion dollars to the federal government debt during the next decade, now addresses the Senate for approval.
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This adds to the growing commercial tensions between the US and China, which have fed concerns about the possible economic impact. In addition, the prospects for greater policy relief by the Federal Reserve continue to undermine the US dollar and help the price of gold to stop the fall of the previous day.
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In the Front of Economic Data, the US Department of Labor (DOL) on Thursday that the number of Americans who requested unemployment insurance fell to 227K last week. This pointed to a positive signal for the US labor market and the economy as a whole, which provided a slight impulse to the US dollar.
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Meanwhile, the preliminary estimate of S&P global showed that the US economy saw a remarkable rebound in the activity of the private sector in May and the compound PMI rose to 52.1. In addition, the US preliminary manufacturing PMI increased to 52.3 in May, the highest level in three months, and the PMI of services reached a maximum of two months of 52.3.
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Trump supposedly told European leaders that Russian President Vladimir Putin is not ready to end the war with Ukraine, since he thinks he is winning. In addition, the murder of two Israeli diplomats in the US maintains the geopolitical risks at stake and should offer greater support to the precious metal of safe refuge.
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The operators now expect the publication of new housing sales data in the US, which, together with the Speeches of FOMC members, will boost the demand of the USD. Apart from this, commercial developments and the feeling of broader risk should provide a significant impulse to the Xau/USD torque.
FXSTERET calculates gold prices in the United Arab Emirates adapting international prices (USD/Aed) to the local currency and the units of measure. Prices are updated daily according to market rates taken at the time of publication. Prices are only reference and local rates could diverge slightly.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
(An automation tool was used to create this publication.)
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
