Gold edged up slightly on Friday, with 24K gold in Dubai increasing by Dh1.75 per gram to Dh310.75, according to the Dubai Jewellery Group.
Despite the uptick, the precious metal faced its worst week in over three years, weighed down by a stronger US dollar and expectations of fewer Federal Reserve rate cuts.
Other Gold Variants in Dubai Saw Declines:
- 22K dropped to Dh287.75 per gram.
- 21K fell to Dh278.50 per gram.
- 18K decreased to Dh238.75 per gram.
Globally, spot gold slipped 0.1% to $2,562.61 per ounce as of 9:54 am UAE time, marking a weekly loss of over 4%. Gold prices have dropped more than $220 from their record high last month, hitting a two-month low earlier this week.
Stronger Dollar and Fed Policy Weigh on Gold
The US dollar strengthened after Donald Trump’s re-election, making gold costlier for holders of other currencies. Market analyst Fawad Razaqzada noted that gold’s decline reflects expectations of a tighter US monetary policy in 2025 under Trump. Higher interest rates increase the cost of holding gold, further pressuring prices.
Fed Chair Jerome Powell stated on Thursday that steady economic growth, a robust job market, and persistent inflation call for caution in aggressively cutting rates. The CME Fedwatch tool shows the likelihood of a December rate cut has dropped to 59%, down from 83% a day earlier.
Outlook for Gold Prices
Matt Simpson, senior analyst at City Index, commented that while Powell’s remarks may limit gold’s short-term gains, potential political turbulence under Trump could drive safe-haven demand. He added that gold could rebound next week, possibly retesting the $2,600 level, given a quiet US economic calendar.
