Dubai gold prices drop below Dh500; 24K lose Dh30.5 in one month

Gold prices in Dubai fell on Tuesday morning, with 24K gold dropping below Dh500 per gram. The precious metal has lost Dh30.5 over the past month amid changing expectations surrounding US interest rates and global economic developments.

Dubai Gold Rates on Tuesday

The 24K gold rate stood at Dh497 per gram, down from Dh500.50 at Monday's market close. Other gold varieties also recorded declines.

The latest prices were:

24K gold: Dh497 per gram
22K gold: Dh460.25 per gram
21K gold: Dh441.25 per gram
18K gold: Dh378.25 per gram
14K gold: Dh295 per gram

Global Gold and Silver Prices

Internationally, spot gold gained 0.07 per cent to trade at $4,143.48 per ounce. Silver prices also moved higher, rising 0.52 per cent to $57.44 per ounce.

According to Vijay Valecha, financial analyst and chief investment officer at Century Financial, gold's weekly performance remained relatively stable, with prices falling 0.70 per cent on Monday. Silver, however, faced greater pressure, recording a decline of 6.33 per cent.

US Federal Reserve Expectations Influence Gold Prices

Gold recovered above $4,180 following comments by US Federal Reserve Chairman Kevin Warsh at the International Monetary Fund's annual meeting in Bangkok.

Warsh did not indicate the outcome of the Federal Open Market Committee's meeting scheduled for October. As a result, market expectations of an interest rate hike weakened.

Valecha noted that the probability of an October rate hike had fallen to 12.7 per cent from 21 per cent a week earlier.

The changing outlook weighed on US Treasury bonds across different maturities and contributed to weakness in the US dollar, providing support for gold. Since gold does not generate interest, it can become more attractive to investors when expectations of tighter monetary policy decline.

Falling Oil Prices Ease Inflation Concerns

Oil prices have also retreated from their monthly highs after US President Donald Trump waived sanctions and tariffs on Russian energy to keep Moscow engaged in Ukraine negotiations, Valecha explained.

The decline in oil prices has eased inflation concerns and reduced expectations of further monetary tightening by the Federal Reserve.

Lower expectations for interest rate hikes can support gold prices by reducing the opportunity cost of holding the precious metal.

Safe-Haven Demand Supports Gold

Gold has also received support from safe-haven demand amid concerns about investments in artificial intelligence. These concerns triggered a sell-off in equities and a decline in bond yields, according to Valecha.

Despite the recent drop in Dubai gold rates, international prices continue to respond to developments involving US monetary policy, inflation, energy markets and investor sentiment.

For Dubai consumers, the latest decline means lower per-gram prices compared with the previous month, although gold rates can change throughout the trading day.