Dubai gold price inches toward Dh500 after traders price in 80% Fed cut chance

Dubai: Dubai’s gold prices picked up on Tuesday morning, with the 24K rate rising to Dh498.75 from Dh495 a day earlier. The 22K category followed the same course, moving to Dh461.75 compared with Dh458.50 on Monday. The gains come as global bullion markets respond to rising expectations of an interest-rate cut at the US Federal Reserve’s December meeting. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The month has been shaped by a relatively narrow price range. After touching Dh504.75 for 24K on November 12, local rates have gradually eased, reflecting a softer global tone. The lower end of the month was reached on November 4, when 24K dipped to Dh475.25. That movement followed a global retracement from October’s record highs.

Gold has been in a consolidation phase since climbing above $4,380 an ounce last month. Even with the recent cooling, it remains up about 56% this year, supported by persistent geopolitical uncertainty and concerns over the fiscal health of major economies.

The latest rise in bullion was driven by renewed confidence that the Fed is prepared to ease policy at its next meeting. “A near-term cut remains a possibility,” New York Fed President John Williams said last Friday, giving markets a boost. He was followed on Monday by Federal Reserve Governor Christopher Waller, who added momentum when he indicated support for a cut next month.

Swap traders now see close to an 80% likelihood that policymakers will deliver another reduction at the December 9–10 meeting. The Fed has already lowered rates twice this year, in September and October, but officials remain divided on whether more easing is justified.

Bullion tends to benefit in a lower rate environment since it pays no interest and becomes more attractive when yields fall.

This week’s data slate carries added weight due to reporting delays caused by the US government shutdown. September retail sales and producer-price figures are due on Tuesday, with jobless claims scheduled for Wednesday. Traders will be looking for clues on consumer resilience and labour-market momentum at a time when the Fed must rely on dated indicators.

Retail numbers are expected to show moderation, reflecting pressure on households from elevated prices. Jobless claims will be watched more closely than usual, as payroll data remains unavailable.