Gold Prices Ease, Allowing Dubai Shoppers to Buy More Grams for Every Dirham Spent.
Dubai: Gold prices remained relatively stable on Monday after recording their steepest weekly decline since June, as investors assessed elevated energy costs and awaited the US Federal Reserve’s upcoming monetary policy decision.
The precious metal traded close to $4,000 per ounce, following a drop of more than 4% last week that pushed prices to their lowest level since July.
In the UAE, retail gold rates edged slightly higher compared with the previous quoted levels. However, prices remained below earlier peaks, offering jewellery buyers an opportunity to purchase more gold for the same budget.
The price of 24-karat gold rose to Dh484 per gram, compared with Dh481.50 previously.
Meanwhile, the widely purchased 22-karat gold remained below the Dh450 threshold, trading at Dh448.25 per gram.
Other gold categories were also available at comparatively lower price points, with 18-karat gold at Dh368.25 per gram and 14-karat gold at Dh287.25 per gram on Monday.
Global Economic Factors Influence Gold Prices
Several international developments are shaping the outlook for precious metals, including movements in crude oil prices, US economic indicators and expectations surrounding Federal Reserve interest rates.
Oil prices retreated from their highest levels in six months after US President Donald Trump told Fox News that a decision was approaching on whether Washington would pursue negotiations with Iran or resume military strikes.
At the same time, US consumer confidence declined to a five-month low in October, adding to concerns about the broader economic outlook.
Changing expectations regarding the Federal Reserve’s interest rate policy have also created uncertainty for gold traders.
Federal Reserve Decision in Focus
Market expectations have shifted considerably over the past month as investors assess whether the US central bank will raise borrowing costs.
Earlier, stronger-than-expected inflation figures prompted traders to increase their bets on an October interest rate hike.
However, subsequent comments from Federal Reserve officials led investors to scale back those expectations.
Financial markets are now pricing in approximately a 10% probability of an interest rate increase at the Fed’s meeting later this week.
Nevertheless, persistently high energy prices continue to fuel concerns about inflation, keeping expectations of a possible rate increase before the end of the year alive.
Higher interest rates typically put pressure on gold because the precious metal does not generate interest income, making yield-bearing investments comparatively more attractive.
Why Gold Fell Sharply Last Week
Gold’s decline below $4,000 per ounce last week came amid broader adjustments across financial markets.
Investors reduced exposure to artificial intelligence-related equities and shifted funds towards bonds as market sentiment changed.
Some investors also sold gold holdings to generate cash and offset losses in their stock portfolios, adding downward pressure to bullion prices.
The selling contributed to gold’s sharpest weekly decline since June.
Gold, Silver and Other Precious Metals Edge Higher
Despite last week’s losses, precious metals recorded modest gains during Monday’s early trading session.
Spot gold increased 0.32% to $4,012.40 per ounce as of 9:45am Dubai time, reflecting a slight recovery from the previous week’s decline.
Silver also advanced, rising 0.2% to $54.22 per ounce, after falling 5.4% during the preceding week.
Platinum and palladium registered marginal gains as well.
Meanwhile, the Bloomberg Dollar Spot Index, which measures the US currency against a basket of major currencies, slipped 0.1%.
Investors will now be closely monitoring the Federal Reserve’s policy announcement, movements in energy markets and further US economic data for indications of where gold prices could head next.
