The Deira gold souq. Although revenue and profitability in the business fell by around 20-30 per cent over the last year, Dubai gold traders say that the gold business has weathered the global economic downturn. Image Credit: Javed Nawab/Gulf News

Dubai: Retail jewellery prices in the UAE dropped on Thursday after the US Federal Reserve opted not to increase the interest rates and global equities staged a rebound.

Those planning to stock up on the precious metal can expect to spend less if they hit the shops soon, with the price of 24-karat  (24K) gold slipping by 50 fils per gram to Dh163.50.Other jewellery pieces, 22K, 21K and 18K also dropped to Dh153.50, Dh146.50 and Dh125.50 per gram, respectively.

Spot gold was down approximately 2.5 per cent to reach a week low price of $1,332 an ounce, according to Century Financial Brokers.

“Gold prices took a small correction as global equities rebounded and [the] Fed kept its rates unchanged, and gave a more aggressive inflation outlook,” Devesh Mamtani, head of investments and advisory for financial markets at Century Financial Brokers.

After its two-day meeting on Wednesday, the Fed announced that it was not going to increase its benchmark interest rate, which is in a range of 1.25 per cent to 1.5 per cent.

However, it hinted that an increase is likely to be implemented this year, as inflation is expected to move up and stabilize around the Fed’s 2 per cent objective over the medium term.

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