Shoppers Head to Dubai’s Gold Souk as Lower Prices and Pre-Festive Offers Make Purchases More Appealing.
Dubai: Gold prices remained close to $4,000 per ounce as investors awaited the US Federal Reserve’s interest rate announcement later this week. The central bank is widely expected to maintain its current rates, while gold showed little movement after declining 0.5 per cent in the previous trading session.
In the UAE, lower gold prices ahead of the festive season are attracting shoppers to Dubai’s gold souks, with buyers looking to take advantage of more affordable rates and seasonal offers.
The price of 24-karat gold stood at Dh483.25 per gram, compared with Dh485.25 the previous day. Meanwhile, 22-karat gold was trading at Dh447.50 per gram, while 18-karat gold was priced at Dh367.75. The rate for 14-karat gold declined to Dh287 per gram.
Gold remains under pressure amid inflation concerns
Despite increased interest from shoppers, international gold prices continue to face downward pressure as persistently high energy costs keep inflation concerns in focus.
The precious metal has also been affected by a broader sell-off linked to artificial intelligence-related investments. Some investors have been liquidating gold holdings to cover losses arising from declines in technology stocks.
On Friday, gold prices dropped to their lowest level since mid-July, reflecting continued uncertainty across global financial markets.
Federal Reserve decision in focus
Market expectations surrounding the Federal Reserve’s future interest rate decisions have shifted considerably over the past month, adding uncertainty to gold’s short-term outlook.
Stronger-than-anticipated inflation figures initially encouraged traders to increase their expectations of an interest rate hike in October. However, subsequent remarks from Federal Reserve officials reduced those expectations.
Financial markets currently estimate approximately a 10 per cent probability of an interest rate increase this week.
Nevertheless, elevated energy prices continue to support speculation that the central bank could raise borrowing costs before the end of the year.
Higher interest rates generally create challenges for gold because the metal does not generate interest income, making interest-bearing investments comparatively more attractive.
Latest gold and precious metal prices
As of 9.45am Dubai time, spot gold had slipped 0.2 per cent to $4,007.66 per ounce.
Silver recorded a sharper decline, falling 2.04 per cent over the previous 24 hours to $53.16 per ounce.
Meanwhile, platinum and palladium prices remained largely unchanged.
The Bloomberg Dollar Spot Index, which measures the performance of the US dollar against a basket of currencies, registered a modest increase.
With international gold prices remaining subdued and festive shopping approaching, buyers in Dubai are closely watching daily rates for opportunities to make purchases at more favourable prices.
