Gold has been exploring new territory with its performance this first quarter of the year. With economic inflation still being a valid threat to investors, many are looking to avail themselves of some more protection against it. Many products such as digital investments are being used for hedging purposes but Gold still seems to be the popular choice at the moment.
This May, we’ve already seen gold rates rise up to new heights with Dubai rates reaching past $2,060 with the potential to reach higher. Now, it’s tempered off a bit at $2,016.12 due to factors such as the latest FED interest rate hike. Although this sudden increase in price has caused domestic shoppers to call off their gold-buying sprees, the current rally means that those with existing stocks have been doing quite well.
For more speculative investors, understanding the underlying causes behind the trend is key to taking advantage of it. Let’s go through some of the recent trends in gold prices this first quarter of the year and how your own gold investments might be affected.
The Middle East, known for its famed markets of gold, has also been quite the active consumer in the market. Previously, the UAE recorded around 46.9 tonnes of gold sales for the entire year of 2022. This was followed by Saudi Arabia and its record of around 37.9 tonnes. However, it seems that this trend is poised to fall off thanks to the rising price of gold this first quarter of the year.
Of course, the effects of the price hike are affecting regions in different ways. Historically prominent markets such as China didn’t see as pronounced of an effect as Chinese New Year’s buying season came rolling in. Other places such as India did see a decrease in gold sales with shoppers wanting to wait out the storm.
May’s FOMC meeting and subsequent interest rate hikes usually would have resulted in a decrease. Many analysts were instead baffled as the volatility of gold slung it upwards through brand-new highs. Gold has now been relegated as an investor’s game with such prices and seems to be staying that way for the time being.
Another threat that some analysts are looking at is the possibility that travelers will be focusing their budget more on experiences and entertainment rather than material souvenirs such as gold. Affecting the jewelry trade, this same trend has been observed in markets as post-COVID traveling returns to sustainable levels.
This leaves us at a point in time where buying gold has also become a more strategic affair as prices fluctuate. In the case of the Dubai and the Dubai Multi Commodities Centre (DMCC), it’s been having a swell time as it made new successes this first quarter. Many of these advancements were due to its new projects regarding Web3 Digital Gaming and even cryptocurrency.
With its presence contributing around 10% to the country’s GDP, the DMCC is an important institution that showcases the strength of the country’s economy. It’s also a proof of concept for all foreign investors looking to do business within Dubai as it leads the charge toward 21st-century development.
Registered companies within the DMCC are known for their reliability as trade partners in both domestic and international markets. Even in the precious metals industry, the free zone has seen tremendous growth with its board looking to capitalize on current momentum to create long-term growth opportunities.
With all the news floating around about price rates and the risk that economic inflation has in store for all of us, it’s nice to have a financial hedge to protect your wealth. Through the use of gold investments, you should be able to stand against all of these while also having a liquid asset that might come in handy in the future. Rakesh Rajdev, a businessman interested in global markets, has helped others reach financial security through the services of APM Bullion.
Our company specializes in providing clients with high-quality bullion products at preferred rates. Some of our products include 1kg gold Emirates gold bar and other globally sourced bullion products. Make sure to visit our website for more information about our products, our talented team, and the many ways that Rakesh Rajdev and Rakesh Rajdev Wife can help you grow your wealth further.