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Monday, December 15, 2025

Dubai: Gold prices rise sharply as markets open after US Federal Reserve cuts

By Vijay Valecha in 'Century in News'

Dubai: Gold prices rise sharply as markets open...

Vijay Valecha, December 15, 2025, Khaleej Times

Gold rates saw a sharp rise throughout the weekend after the US Federal Reserve’s decision to cut interest rates by 25 basis point to a range of 3.5 to 3.75 per cent came on Friday.

On Monday morning, 24K gold price rose to Dh521.25 per gram, and 22K, 21K,18K, and 14K were selling at Dh482.75, Dh462.75, Dh396.75, and Dh309.50 per gram, respectively. Spot gold prices rose to $4,343.51 at 10.15am in the morning.

In contrast, the price of 24K gold stood at Dh506.75 per gram on Wednesday, before the Fed rate cuts were announced.

According to Vijay Valecha, CIO of Century Financial, the sharp movement in gold prices can be attributed to a number of factors.
“Central banks bought 410 tonnes of gold in the first half of 2025, led more by those of emerging countries that together accounted for above 24 per cent of the five-year average as they continue to diversify from foreign exchange reserves,” he said.
“Monetary policy also played a part in gold’s rebound. The Fed delivered its third consecutive interest rate cut last week, which has been bullish for gold because it reduces the opportunity cost of holding the non-yielding asset. With lower returns on cash and bonds, gold sees aggressive central bank buying and support from institutional investors.”
He also pointed out that after pausing in the middle of the year, central banks came back aggressively. “They bought a net 53 tonnes of gold in October, the highest monthly total for 2025 so far,” he said. “The Chinese central bank has added to its reserves for 13 months in a row, and total reserves now stand at about 74.1 million ounces. Moreover, central banks have been buying even with gold above $4,000/oz, suggesting their activity is not price sensitive.”
Gold prices have increased more than seven per cent from November. Vijay predicted that with just 13 sessions remaining in 2025, the yellow metal is heading into year-end strongly, holding close to all-time highs. “All factors seem well aligned for bullion, making it less probable that support will weaken for gold before the end of the year,” he said.
Earlier this year, gold prices rose to a record high of Dh525.25 on October 21, before falling sharply.

Source

Khaleej Times

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