Dubai gold prices stay low sweetening the deal for shoppers

Dubai: Gold hovered around $4,000 an ounce as traders waited for this week’s Federal Reserve decision, which is widely expected to leave interest rates unchanged. The metal barely moved after losing 0.5 per cent in the last session.

In the UAE, shoppers are flocking the gold souks as prices in the run-up to the festive weeks align well with the lower rates. 24-karat gold is priced at Dh483.25 versus Dh485.25 it traded the previous day. 22-karat gold is trading at Dh447.50 , 18-karat is being priced at Dh367.75 while 14-karat is down to Dh287.

Gold continues to stay under pressure. Stubbornly high energy prices have kept inflation worries alive, and the metal also got dragged into the wider unwinding of the AI trade. Investors are selling gold to cover losses that occur when tech stocks tumble. On Friday, gold fell to its lowest level since mid-July. 

Expectations for the Fed’s rate path have moved over the past month, which clouds the near-term outlook for gold. Hotter-than-expected inflation data first pushed traders to raise bets on an October hike, but comments from central bank officials later cooled those wagers.

Markets now see about a 10 per cent chance of a rate increase this week. High energy prices are still fueling bets on a hike before the end of the year. That matters for gold, since higher borrowing costs weigh on an asset that pays no interest.

Spot gold slipped 0.2 per cent to $4,007.66 an ounce as of 09:45 am in Dubai. Silver erased 2.04 per cent to $53.16 an ounce in the last 24 hours, while platinum and palladium barely moved. The Bloomberg Dollar Spot Index, which tracks the US currency, rose slightly.