Dubai gold prices fell for the fifth straight day on Friday, hitting a more than two-month low due to higher oil prices fuelling concerns about an interest rate hike by the US Federal Reserve.
The 24K gold price opened lower at Dh482.75 per gram on Friday, down from Dh485.75 per gram at the market close on Thursday, losing Dh3 per gram.
Among the other variants of the precious metal, 22K, 21K and 18K slipped to Dh447.0, Dh428.5 and Dh367.5 per gram, respectively.
Spot gold was down 0.8 per cent at $4,011 per ounce. Silver lost 1.8 per cent to $198.
The recent decline in gold prices comes as a welcome relief for gold and jewellery buyers in the UAE ahead of Diwali, one of the most auspicious festivals for purchasing precious metals.
Lower prices make gold jewellery, coins and bars more affordable, allowing households to buy more within their budgets or opt for heavier pieces without significantly increasing their spending.
The price drop could also encourage buyers who postponed purchases during the recent rally to return to the market, boosting retail sales during the festive season.
Ranim Turfa, head of research and market analysis for Mena at Tickmill, said gold edged lower as rising oil prices revived inflation concerns and reinforced hawkish monetary policy expectations ahead of next week’s Federal Reserve meeting.
“Elevated tensions in the Middle East could keep crude prices supported, sustaining pressure on the Fed to maintain a tight stance. While the Fed is widely expected to hold rates steady in October, markets continue to price in a December hike, and expectations of further tightening in 2027 could add to the headwinds for gold. Whether those hikes materialise this year or next is likely to remain the key driver of sentiment towards the metal,” said Turfa.
Dilin Wu, research strategist at Pepperstone, said gold is under pressure from higher-for-longer rate expectations and broader market deleveraging.
“Rather than attracting safe-haven demand, the sharp sell-off in US equities may have prompted some investors to liquidate gold positions to cover losses or meet margin calls elsewhere,” he added.