Gold prices continued their record rally on Tuesday, April 22, 2025, propelled by concerns stemming from U.S. President Donald Trump’s criticism of Federal Reserve Chair Jerome Powell. This criticism dampened risk sentiment, leading investors toward the safe-haven bullion. In Dubai, gold rates demonstrated significant gains, with 24-carat gold increasing AED10.75 in the past 24 hours to AED420.00. Similarly, 22-carat gold rose to AED388.75. Additionally, 21-carat gold gained AED9.50 during this period to reach AED388.75, while 18-carat gold edged up AED8.00 to AED319.50.
Spot gold was up 1.4 percent at $3,481 an ounce, after reaching a record high of $3,473.03 per ounce earlier in the session. U.S. gold futures firmed 1.7 percent to $3,482.40. “Investors have been giving a wide berth to U.S. assets amid tariff worries and Trump-Powell dramas, which has kept gold in prime position to capitalise on the dollar’s woes,” reported Reuters, citing Tim Waterer, chief market analyst at KCM Trade. Trump reiterated his call for an immediate reduction in interest rates on Monday, cautioning that the U.S. economy could face a slowdown while criticizing Powell’s decision to maintain rates until there is clarity on the inflation impact of Trump’s tariff plans.
Asian stock markets struggled to maintain stability following a rapid sell-off of U.S. assets that weakened Wall Street and the dollar. On Monday, China accused Washington of abusing tariffs and cautioned countries against striking a broader economic deal with the U.S. at its expense. “There remains a chance of a pullback given the rapid rate of gains on display so far this month. But there is reason to believe that buyers will be keen on gold should a pullback occur given that high economic uncertainty remains a prevailing market theme,” Waterer remarked. Gold, viewed as a safe haven against economic uncertainties, surpassed the $3,300 mark last Wednesday, April 16, 2025, and continued its upward trajectory, crossing $3,400 on Monday.
Markets are eagerly anticipating speeches from several Fed officials later this week, hoping for insights into future monetary policy amid concerns about the central bank’s independence. Other precious metals were also impacted by the surge in gold prices. Spot silver fell 0.4 percent to $32.57 an ounce, platinum gained 0.3 percent to $964.78, while palladium rose 1.3 percent to $939.50. Copper prices extended their gains on Tuesday, hitting a two-week high as the greenback remained weak. However, concerns regarding hefty U.S. tariffs on top importer China kept investors cautious. Benchmark copper futures on the London Metal Exchange rose 0.7 percent to $9,289.60 a ton, while copper futures expiring in May gained 0.4 percent to $4.7390 a pound.
UAE residents are adapting their strategies in response to the soaring gold prices. Shoppers are opting to buy new gold instead of exchanging old jewellery, as they anticipate even better value later in this market cycle. The Dubai gold rate for a 22K gram rose to Dh381.5 on April 22, 2025, which is just over Dh10 higher than it was on April 20. Shamlal Ahmed, Managing Director – International Operations at Malabar Gold & Diamonds, noted, “Most UAE resident-shoppers have switched to buying new gold wherever possible rather than exchange.”
Gold shoppers have experienced a price shock but are quick to adapt, recognizing that gold is the only asset that outperforms in times of uncertainty. If yesterday’s talk was about when gold could clear $3,400 an ounce, it’s now looking to have a good shot at breaching $3,500. Bullion is currently valued at $3,460, up by nearly $150. The consensus is that gold price volatility is here to stay, and customers are adjusting to this new norm.
In Dubai's iconic Gold Souk, jewellers are stepping up their game to win back Indian gold buyers, who once flocked to the emirate for better prices and broader variety. Indian tourists are a major consumer group during festive seasons like Diwali and Akshaya Tritiya. To stay competitive, Dubai jewellers are pivoting from price to product, curating exclusive collections that include intricate Turkish, Italian, and Singaporean designs, and even reviving traditional Calcutta and temple jewellery styles.
High gold prices may dampen demand, as shoppers are rethinking their choices and some are turning to diamonds and lighter gold jewellery. Retailers have reported a noticeable drop in foot traffic and purchases, with many citing affordability concerns. Lalita Dave, a shopper at the Gold Souk, expressed, “It’s a little bit tough to afford gold, so I think it’s better to go with diamonds.”
As gold prices surged to a new all-time high above $3,500 per ounce, retail prices in India have also touched the Rs 1 lakh per 10 gram mark. Prices have climbed over 30% since the beginning of the year 2025, driven by rising investor anxiety after Trump’s criticism of Powell. Analysts expect gold to remain well-supported, with technical support levels at $3,450 and $3,400, and the next psychological target being $3,600.
Gold prices are booming, but the shift toward alternative options like lab-grown diamonds is evident. As gold prices rose 27% last year, demand for gold jewellery in the UAE fell by around 13%, outpacing an 11% drop globally. This trend indicates that if high prices persist into 2025, jewellery demand could weaken further across regions like India and the Gulf, where buying trends are deeply interconnected.
In summary, while gold prices continue to soar, the market is witnessing a significant shift in consumer behavior as buyers explore alternatives in response to the soaring costs. With uncertainty in the global economy, gold remains a focal point for investors, but the rising prices are reshaping the landscape of jewellery purchasing.
