Gold prices in Dubai continued their downward trend on Thursday, with the precious metal dropping by Dh2 per gram at the opening of the markets, following a week of steady declines.
According to Dubai Jewellery Group data, 24K gold was priced at Dh406.75 per gram at 9am, falling from Dh408.75 on Wednesday. The drop brings the weekly loss for 24K gold to nearly Dh7 per gram. Prices for other variants also declined: 22K gold traded at Dh376.50, 21K at Dh361.00, and 18K at Dh309.50 per gram.
The price drop mirrors the international trend, where spot gold fell nearly one per cent to $3,356.96 per ounce, following signals from the U.S. Federal Reserve that interest rate cuts may come at a slower pace than previously anticipated.
While the Fed’s latest “dot plot” projection still reflects expectations of two rate cuts in 2025, the breakdown reveals deep divisions among policymakers. Eight members anticipate a 50 basis-point cut, seven foresee no rate change—up from just four at the last meeting—and two expect only a single cut.
“The market reaction to the Fed decision wasn’t exactly cheery,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “The S&P 500 dipped after the announcement, though the U.S. two-year Treasury yield eased slightly. Investors appear cautiously optimistic, leaning towards expecting two cuts, though there’s nearly a 50-50 split between no cuts and a modest reduction.”
Adding to the market unease is the strengthening of the U.S. dollar, which gained ground on Thursday amid geopolitical concerns. Traders noted a shift to safe-haven assets, including the dollar, on speculation that the U.S. may become directly involved in escalating Middle East tensions as soon as this weekend.
“This growing uncertainty could push investors to seek refuge in the dollar,” Ozkardeskaya added. “Even if Fed policy signals remain mixed, geopolitical risks alone are enough to prompt defensive financial moves ahead of a potentially volatile weekend.”
Gold prices typically move inversely to interest rates and the strength of the U.S. dollar. As both factors currently work against the precious metal, analysts suggest that bullion may remain under pressure in the near term.
Local jewellers in Dubai expect demand to pick up if prices continue to fall, especially with the Eid holidays approaching and tourists arriving during the summer season.
