Stock UAE Gold
Gold prices for 22K gold, which is most often used for jewellery, have been above Dh200 per gram for many weeks now. Image Credit: Virendra Saklani/Gulf News

Dubai: On Thursday afternoon, Dubai's Gold and Jewellery Group set their suggested retail gold jewellery price at Dh199.50 for one gram of 22K gold. This is the first time in weeks that the yellow metal's prices dropped to this level.

On Wednesday, the US Federal Reserve increased their interest rate by 50 base points, which was mirrored by UAE and other GCC banks as well. The increase in this rate, along with further expected hikes, is what has resulted in the drop in price of gold this week.

The prices for 24K, 21K and 18K were set at Dh215.25, Dh193 and Dh165.50 respectively. These prices are set based on international gold rates and is updated thrice daily, with one more update to come in on Thursday. 

Globally, gold prices fell nearly 1 per cent on Thursday, after the Fed Chair Jerome Powell said more interest rate hikes would come next year.

More hikes coming

Marker participants now await rate-hike decisions from the Bank of England and the European Central Bank later in the day, with both expected to deliver a 50-basis point rate hike.

Norway's central bank raised borrowing costs to the highest level in more than a decade, and signaled it still plans to raise its key interest rate to 3 per cent at the beginning of next year even as the Nordic economy faces a recession.

Swiss National Bank Chairman Thomas Jordan said it was too early to "sound the all-clear" on high inflation after the central bank hiked interest rates on Thursday and hinted further increases could follow. The Swiss National Bank said in a statement that it was raising its policy rate to 1.0 percent to counter "increased inflationary pressure and a further spread of inflation".

- Inputs from Reuters, Bloomberg