Why are US rate-cut expectations lifting Dubai gold prices?

Dubai: Dubai’s gold prices steadied near recent highs on Thursday, tracking firm global sentiment as markets reinforced expectations of a December interest rate cut in the US. Retail 24-carat gold was trading at Dh500.25, unchanged from the previous two sessions, while 22-carat gold held at Dh463.25, marginally above levels printed earlier in the week.

Price movements through November illustrate the current consolidation pattern. After opening the month near Dh482.25 for 24K, prices pushed to the Dh495-Dh500 range in late November, underlining steady local demand despite shifting global momentum. For 22K, retail rates moved in parallel, rising from mid-Dh440 levels at the start of the month to above Dh460 in recent days. The month also logged a brief peak above Dh504 for 24K and Dh467 for 22K during mid-November trading before normalising to today’s tighter range.

Across the UAE jewellery market, November’s trend reflects limited intraday volatility but gradually rising price support. The 24K category printed Dh495 on November 24, sub-Dh490 for several sessions between November 17-23, and near Dh492-Dh495 during November 20-21. At the beginning of the month, retail 24K prices fluctuated between Dh475.25 and Dh483.75 across November 3-4, reflecting an early-month dip from the late-October close near Dh481.50. Similarly, 22K prices followed the same trajectory through early November, bottoming at Dh440 on November 4 following late-October prints in the mid-Dh445 range. The category printed Dh453.50-Dh455.50 for several sessions from November 18-21 before settling in the current Dh463 bracket.

Looking back over Dubai’s month-to-date average, retail 24K gold traded at approximately Dh488.66, while 22K averaged Dh451.05, reflecting higher price prints earlier in the month that now appear better supported by jewellery buying interest than short-term investment demand.

The macro signal

Global bullion was trading around $4,160 an ounce, having gained 1% in the previous session on comments from Federal Reserve policymakers that pointed to further easing. Swap traders now price roughly an 80% probability of a 25-basis-point rate cut in December. The latest weekly jobless claims are not expected to change the Fed’s direction, even with moderating momentum in gold-backed funds.

Investor positioning found further conviction as Kevin Hassett emerged as a leading contender to head the Federal Reserve. Traders see him as likely to align with former President Donald Trump’s preference for lower rates, a policy stance that has historically supported non-interest paying assets such as gold.

Local implications in Dubai

Regional and retail flows in Dubai remained resilient despite flat inflows to gold-backed ETFs globally over the last three weeks. Buyer activity in the UAE continues to prioritise jewellery-led demand cycles. First-time investors and jewellery buyers typically increase participation when real rates trend lower relative to inflation.

Bullion has risen nearly 60% this year, on track for its best annual performance since 1979, supported by elevated central bank purchases and a wider retreat from sovereign bonds, currencies, and interest-linked assets.