Dubai’s 24-Karat Gold Price Slips to Dh486.50, Down From Dh489 the Previous Day.
Dubai: Gold prices have been hovering around the $4,000-an-ounce mark as markets await the US Federal Reserve’s decision later today. Overnight, bullion fell by more than 0.5 per cent, giving back some of the 1.1 per cent gain recorded in the previous session.
Rising oil prices have also weighed on market sentiment, with Brent crude climbing to $115 a barrel. The Wall Street Journal has reported that Washington warned several Gulf states to prepare for a possible renewed military campaign against Iran.
In the UAE, gold prices continued to ease, offering potential savings for shoppers. On Wednesday, 24-karat gold was priced at Dh486.50 per gram, down from Dh489 a day earlier. The price of 22-karat gold fell to Dh450.50, while 18-karat gold stood at Dh370.25 per gram. Meanwhile, 14-karat gold declined to Dh288.75 per gram.
Heavy buying could push prices higher
Although bullion is testing the $4,000 level, demand from Chinese and Indian households has helped support the market. Physical buyers and bargain hunters have prevented a deeper decline, with interest in gold strengthening over the past two months as prices retreated and domestic equities became less attractive.
However, Indian buyers could temper demand despite the approaching festive season. Households have been postponing purchases in anticipation of further price declines, according to the country’s largest precious metals refiner, MMTC-PAMP India, as reported by Bloomberg.
India, the world’s second-largest gold consumer, has experienced subdued demand this year following a duty increase in May to 15 per cent, from less than half that level. Prime Minister Narendra Modi has repeatedly encouraged citizens to reduce gold purchases to help narrow the trade deficit, as the country imports nearly all its gold. The higher duty has also pushed more transactions into informal cash markets.
Could gold prices fall further?
Konstantinos Chrysikos, Head of Customer Relationship Management at Kudo, said the outlook for bullion would depend partly on the Federal Reserve’s policy signals and movements in oil prices.
“Any hawkish messaging, especially if oil keeps climbing, would likely extend bullion’s losses. Any signal of a less restrictive stance could set up a relief rebound. Even then, markets are still pricing further tightening in December and beyond, which is likely to limit any recovery.”
Gold is also recovering from last week’s sell-off in artificial intelligence stocks. The metal dropped to its lowest level since mid-July as investors sold bullion to offset losses in other holdings. A subsequent rally in technology stocks, driven by renewed enthusiasm for AI-related investments, has since eased some of that pressure.
At 10.15am Dubai time, spot gold was down 0.77 per cent at $4,030.28 an ounce. Silver declined 1.03 per cent to $53.88 an ounce, while platinum and palladium also traded lower. The Bloomberg Dollar Spot Index, which tracks the US currency against a basket of peers, rose 0.1 per cent.
