Gold Briefly Falls Below $4,000 as Stock Markets Decline and Traders Scale Back Expectations of Federal Reserve Rate Hikes.
Dubai: Gold prices fell below the $4,000-per-ounce mark during early trading on Friday, reaching their lowest level in more than three months as a global market sell-off prompted investors to reduce their holdings of the precious metal.
In the UAE, gold prices have declined by more than Dh20 per gram over the past five days. The price of 24-karat gold dropped from Dh504.25 at the beginning of the week to Dh482.75, representing a fall of Dh21.50.
Meanwhile, 22-karat gold is trading below Dh450 per gram, while 18-karat and 14-karat gold are priced at Dh367.50 and Dh286.50, respectively.
Internationally, bullion declined by as much as 0.9 per cent to below $3,990 an ounce, its weakest level since mid-July. The decline followed a nearly 3 per cent fall on Thursday, although gold later recovered part of its losses.
Global equity markets continued to weaken on Friday as investors reduced exposure to artificial intelligence-related stocks and shifted funds into US government bonds. Treasury bonds largely maintained the gains recorded during the previous trading session.
Federal Reserve Policy Expected to Influence Gold Prices
Market attention is now focused on the US Federal Reserve’s upcoming monetary policy meeting, which could play a significant role in determining gold’s near-term direction.
Ranim Turfa, Head of Research and Market Analysis, MENA, at Tickmill, said rising energy prices and renewed inflation concerns were contributing to the pressure on bullion.
“Gold edged lower as rising oil prices revived inflation concerns and reinforced hawkish monetary policy expectations ahead of next week’s Federal Reserve meeting,” Turfa said.
Investors widely anticipate that the Federal Reserve will keep interest rates unchanged at its upcoming meeting. However, traders continue to factor in the possibility of a rate increase in December.
Expectations of further monetary tightening in 2027 are also weighing on gold prices, as higher interest rates generally reduce the attractiveness of non-interest-bearing assets such as bullion.
“Whether those hikes materialize this year or next is likely to remain the key driver of sentiment towards the metal,” Turfa added.
With uncertainty surrounding future US interest rate decisions, investors are expected to closely monitor Federal Reserve announcements for indications of where gold prices may head next.
Gold’s $4,000 Level Remains Crucial for Market Direction
From a technical standpoint, analysts are closely monitoring the $4,000-per-ounce level as an important indicator of gold’s next price movement.
A decisive decline below this threshold could trigger further selling as investors close their long positions, potentially pushing bullion towards $3,960 an ounce.
For gold to demonstrate signs of a meaningful recovery, analysts believe prices would need to climb back into the $4,100 to $4,110 range.
Dilin Wu, Research Strategist at Pepperstone, remains cautiously optimistic about gold’s medium-term prospects, citing continued central bank purchases and the metal’s role as a hedge against fiscal uncertainty.
“But we need to see selling pressure ease and buyers return before becoming more confident in a sustained recovery,” Wu said.
Gold and Silver Decline as Other Precious Metals Gain
At 10:45 am Dubai time, spot gold was trading at $4,013.83 per ounce, down 0.76 per cent.
Silver also recorded losses, falling 1.55 per cent to $54.09 an ounce.
In contrast, platinum and palladium registered modest gains during the trading session.
Meanwhile, the Bloomberg Dollar Spot Index, which measures the performance of the US currency, remained largely unchanged.
Market participants continue to watch key technical price levels and upcoming monetary policy developments for clearer indications of gold’s future direction.
