Gold steadies in Dubai with traders waiting for the Fed’s final 2025 rate call

Dubai: Gold prices in Dubai held unchanged on Wednesday morning, with 24-karat gold trading at Dh506.25 per gram and 22-karat at Dh468.75, according to the latest retail data. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

This week’s stability marks the first extended period of calm after several days of modest fluctuation early in the month. From December 1 to December 10, prices have oscillated within a relatively narrow band, moving between Dh503.75 and Dh511.75 for 24-karat gold. Prices softened briefly after the start of the month, falling from Dh511.75 on December 1 to Dh503.75 on December 2, but have since settled around Dh506 levels. The restrained movement reflects subdued local demand and traders’ reluctance to take fresh positions ahead of the US Federal Reserve’s final meeting of 2025.

Globally, gold edged higher as traders looked for direction from the Fed, which is widely expected to deliver a 25-basis-point rate cut. Market participants are also assessing how aggressively policymakers may pursue monetary easing in 2026.

The fall in 10-year US Treasury yields after last week’s spike has lent support to bullion, which typically benefits from lower interest rates since it offers no yield. However, volatility in US government bonds and uncertainty around the next phase of policy easing have kept risk appetite in check. Money markets now anticipate no more than two rate reductions in 2026, a significant pullback from earlier projections.

Despite the recent pause, gold remains one of the standout assets of the year. Prices have climbed nearly 60% in 2025, driven by robust central-bank buying and record inflows into gold-backed exchange-traded funds. Although the metal has retreated from its late-October peak above $4,380 an ounce, it continues to find support from expectations of prolonged monetary easing and persistent geopolitical risk.

“Gold is set to close 2025 as one of the best-performing assets globally, rising almost 60% year-to-date, its strongest annual performance in more than 45 years,” said Farhan Badami, Market Analyst at eToro.

He noted that despite easing from record highs, gold remains “on firm footing as markets head into the Federal Reserve’s final meeting of the year.” According to Badami, “Markets remain convinced that a December rate cut is coming, and the backdrop still supports that view.”

Badami said that while inflation has been volatile, it remains “largely contained,” adding that recent tariff measures have not sparked renewed price pressures. The ongoing US government shutdown, he explained, has limited access to fresh data, complicating policy decisions. Still, equity markets have rallied, with the S&P 500 gaining about 5% since November, reflecting confidence that a rate cut is already priced in.

The Fed’s Chair, Jerome Powell, faces what Badami calls “a delicate communications challenge.” He said, “He needs to strike a balance between confidence that inflation continues to move in the right direction and reassurance that the Fed is not cutting because it fears a sharper downturn.”

Throughout 2025, gold has thrived amid safe-haven demand, geopolitical friction, and continued accumulation by central banks. Exchange-traded fund inflows have reached all-time highs, drawing participation from both institutional and retail investors.

Looking ahead, Badami said the focus will shift to how far the rally can extend. “Central banks look set to keep accumulating bullion as they hedge against currency and inflation risks. That steady official demand remains a strong anchor for prices, and $5,000 is not off the table,” he said.

He added that the same macroeconomic tensions that powered this year’s rise, political uncertainty, inflationary undercurrents, and fiscal shifts in Washington, are unlikely to dissipate. “This environment,” Badami said, “sets the stage for another year in which investors continue to seek comfort, stability, and protection in the world’s oldest safe haven.”