Dubai gold prices ease as traders await Fed decision

Dubai gold prices have eased as traders await the Federal Reserve's decision, following the metal's steepest weekly decline since June. The price of gold hovered near $4,000 an ounce, having dropped over 4% last week to its lowest level since July. In the UAE, gold prices increased slightly, allowing consumers to get more grammage for each dirham. 24-karat gold trades at Dh484, while 22-karat is priced below Dh450 at Dh448.25. Meanwhile, 18-karat gold is at Dh368.25, and 14-karat is priced at Dh287.25.

External factors include easing crude oil prices, which dropped from a six-month high after President Trump indicated a decision was near on Iran negotiations or resuming strikes. American consumer confidence also fell to a five-month low in October, creating uncertainty about the Federal Reserve's rate path. Over the past month, views on the Fed's path have shifted, impacting the near-term outlook for gold.

Traders initially invested in bets for an October hike, but central bank officials' comments reversed those forecasts. Currently, there is a roughly 10% chance of a rate hike at the Fed's upcoming meeting.

Pressure from high energy costs has continued to influence gold prices, as higher borrowing costs weigh against the precious metal, which pays no interest. Last week's slide below $4,000 an ounce was a result of investors moving away from AI-linked stocks and into bonds, selling gold as they sought to offset equity losses. Spot gold rose by 0.32% to $4012.4 an ounce in Dubai, while silver increased by 0.2% to $54.22 an ounce.

Platinum and palladium also showed slight gains. The Bloomberg Dollar Spot Index, tracking the US currency, dropped 0.1%.