UAE gold prices hold steady at Dh439.50 despite Fed rate cut uncertainty

Dubai: Dubai gold prices remained unchanged this morning at Dh439.50 per gram for 24-karat and Dh407 for 22-karat, despite the US Federal Reserve’s quarter-point interest rate cut that initially sent global bullion to fresh record highs.

The stability comes after a volatile overnight session that saw gold spike to $3,707.57 per ounce immediately following the Fed announcement, only to close 0.8 per cent lower as investors digested Fed Chair Jerome Powell's cautious commentary on future rate cuts.

(Check the latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait. Meanwhile, the Indian gold rate for 24-carat gold was at ₹11,116 per gram, and the rate for 22-carat gold is about ₹10,190 per gram.) 

The rate decision comes amid unprecedented political interference at the Fed. Governor Lisa Cook faces a legal battle with President Donald Trump over mortgage fraud allegations, while newly appointed Stephen Miran was the only governor voting against Wednesday's decision – preferring a larger half-point cut.

This political uncertainty could drive gold higher, with Goldman Sachs predicting prices near $5,000 per ounce if just 1 per cent of privately held US Treasuries shift to gold. Deutsche Bank raised its forecast to $4,000 per ounce for next year.

UAE buyers face tough choices

For Dubai's gold shoppers, the mixed signals create a dilemma. Prices have surged Dh37.75 per gram over the past four weeks, with 24-karat gold climbing from around Dh401 to current levels near Dh440.

The UAE dirham's peg to the US dollar means local prices mirror global movements almost instantly. Wednesday's dollar strength following Powell's comments helped keep Dubai rates stable despite gold's record-breaking spike.

Current regional prices show the premium UAE buyers pay: while Indian 24-karat gold trades at ₹11,116 per gram, Dubai's rate of Dh439.50 reflects import costs and local market dynamics.

What's next for shoppers

With two more Fed rate cuts penciled in for this year, the direction depends on inflation data and geopolitical developments. Lower rates typically benefit gold as a non-yielding asset, but Powell's measured approach suggests the rally may face resistance.

Dubai jewellers report steady demand despite high prices, with investors viewing current levels as entry points for long-term holdings. However, retail buyers increasingly prefer smaller purchases or are delaying major jewellery investments.