Dubai 24K gold slips under Dh600, lowest since February

Dubai: Gold prices fell below the Dh600 mark on Wednesday afternoon, with the 24K rate dropping to Dh597 per gram at 3.40 pm from Dh601 in the morning, while 22K declined to Dh552.75 from Dh556.50, tracking a broader pullback in global markets. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The decline reflects a shift in sentiment after gold traded in a narrow range in recent sessions, with international prices now at their lowest level in about a month.

Global prices under pressure

Spot gold slipped below the $5,000 level, falling around 1% to $4,956.53 an ounce in London trading, marking the weakest level since mid-February. Other metals also softened, with silver, platinum and palladium recording modest losses.

The move comes as investors reassess expectations around US monetary policy and rising inflation risks linked to higher oil prices.

Energy markets remain a key driver. Oil holding above $100 a barrel has raised concerns that inflation could stay elevated, limiting the room for central banks to cut interest rates in the near term. Higher borrowing costs typically weigh on gold, which does not offer interest income.

Fed outlook in focus

Attention is now on the US Federal Reserve’s policy decision and its forward guidance. Markets widely expect rates to remain unchanged, but the tone around inflation and growth will be closely watched.

Inki Cho, Financial Markets Strategist Consultant to Exness, said, “Gold remained under some pressure on Wednesday and traded near its lowest level in roughly a month.”

She added, “Energy prices continue to drive sentiment, influencing the inflation outlook and Treasury yields. Elevated oil levels are reinforcing concerns that inflation could remain sticky, reducing the likelihood of near-term monetary easing by the Federal Reserve, weighing on gold in the process.”

Recent outflows from gold-backed exchange-traded funds have also pointed to softer investor demand, adding to downward pressure.

Broader central bank signals

Markets are also preparing for rate decisions from other major central banks, including those in Europe, Switzerland, Canada and Japan, which could add volatility to precious metals.

Cho said, “Markets are now focused on the Fed’s monetary policy decision and, more importantly, its economic projections.”

She added, “A more cautious tone would likely support yields and the dollar, maintaining pressure on gold.”

Support remains in place

Despite the recent pullback, gold has gained about 15% this year, supported by continued central bank buying and demand for safe-haven assets.

Cho noted, “Continued tensions in Eastern Europe and sustained central bank purchases could limit downside risks for the metal, keeping the long-term bullish trend intact.”

The drop below Dh600 marks a notable shift for UAE buyers after weeks of elevated prices, with the market now entering a softer phase.

Prices remain sensitive to global cues, particularly oil movements and central bank signals, leaving the near-term outlook dependent on how inflation and interest rate expectations evolve in the coming weeks.

- With inputs from Bloomberg.