UAE gold buyers get Diwali relief as prices fall for fifth straight day

Dubai gold prices declined for the fifth consecutive day on Friday, reaching their lowest level in more than two months. The fall comes as rising oil prices fuel concerns that the US Federal Reserve could raise interest rates.

The decline offers some relief to gold and jewellery buyers in the UAE ahead of Diwali, a major festival during which many people traditionally purchase precious metals.

Dubai Gold Prices on Friday

The 24-karat gold price opened at Dh482.75 per gram on Friday, down from Dh485.75 per gram at Thursday's market close, marking a drop of Dh3 per gram.

Other gold categories also recorded declines. The latest prices were:

24K gold: Dh482.75 per gram
22K gold: Dh447 per gram
21K gold: Dh428.50 per gram
18K gold: Dh367.50 per gram

The continued decline has drawn attention from UAE shoppers planning to purchase gold jewellery and gifts for the festive season.

Global Gold and Silver Prices Decline

International precious metal prices also moved lower on Friday. Spot gold fell 0.8 per cent to $4,011 per ounce, while silver dropped 1.8 per cent to $198.

Higher oil prices have raised concerns about inflation and the possibility of further interest rate increases by the US Federal Reserve. Such expectations can put pressure on gold, which does not generate interest income.

Market uncertainty and changes in investor behaviour have also contributed to the recent weakness in gold prices.

Gold Price Drop Offers Relief Ahead of Diwali

The fall in gold prices comes at a significant time for UAE consumers preparing for Diwali. Gold purchases are an important part of the festival for many families, making price movements particularly relevant in the days leading up to the celebrations.

Lower prices could encourage some shoppers to purchase jewellery, coins and other precious metal items. However, final jewellery costs may vary depending on making charges, retailer pricing and applicable taxes.

Why Are Gold Prices Falling?

Rising oil prices and concerns about the US Federal Reserve's interest rate decisions have weighed on the precious metal. Higher interest rates can make interest-bearing assets more attractive compared with gold.

Market analysts have also suggested that the sharp sell-off in US equities may have encouraged some investors to sell gold holdings to cover losses or meet margin calls in other investments, rather than turn to gold as a safe-haven asset.

Gold prices may continue to respond to movements in oil prices, interest rate expectations and broader financial market conditions. UAE buyers should check the latest local rates before making a purchase, as prices can change throughout the trading day.