Gold prices in the United Arab Emirates edged lower on Thursday, slipping by Dh1 per gram after a brief rebound, as investors weighed the impact of persistent inflation and expectations that US interest rates will remain elevated for longer.
At the opening of the market, 24-carat gold was priced at Dh547.25 per gram, down from Dh548.25 at Wednesday’s close. Other gold variants also recorded modest declines. The price of 22-carat gold fell to Dh506.75 per gram, while 21-carat traded at Dh486.00. Eighteen-carat gold was priced at Dh416.50, and 14-carat gold stood at Dh325.00 per gram.
In international markets, spot gold was trading at $4,562.70 per ounce by 9:30 a.m. UAE time. Silver moved in the opposite direction, rising 1.98% to $72.16 per ounce.
The slight drop in local gold prices follows the US Federal Reserve’s decision to keep interest rates unchanged at its latest policy meeting. The central bank signalled that it would continue monitoring inflation, particularly as higher energy costs linked to geopolitical tensions involving Iran continue to affect the global economy.
As expected, the UAE Central Bank also left its benchmark interest rate unchanged at 3.65%, maintaining alignment with US monetary policy due to the dirham’s peg to the dollar.
Analysts say stubborn inflation has reduced hopes for near-term rate cuts, a development that typically weighs on gold prices. Higher interest rates tend to make non-yielding assets such as gold less attractive to investors.
“US inflation rose to 3.3% in March 2026 from 2.4% in February, largely driven by rising energy prices,” said Vijay Valecha, Chief Investment Officer at Century Financial. He noted that gasoline prices climbed 18.9%, while fuel oil surged 44.2% over the period.
Valecha said financial markets are now assigning a 99% probability that the Federal Reserve will leave rates unchanged at its April meeting. Expectations for rate cuts later this year have also diminished significantly, with investors now hesitant to price in even a single quarter-point reduction.
Attention is also turning to leadership changes at the Federal Reserve. Current Chair Jerome Powell is expected to step down from the role, though he will remain on the board. Former Fed governor Kevin Warsh is widely viewed as the leading candidate to succeed him.
Investor demand for gold has shown mixed signals. Gold exchange-traded funds recorded substantial outflows in March, particularly in North America, where withdrawals reached a record $13 billion. Although inflows resumed in April, analysts say they have not been strong enough to fully offset the earlier losses.
Central bank purchases continue to support the market, though recent buying has remained below last year’s monthly average, suggesting a more measured pace of accumulation.
