Gold prices in Dubai continue to fall: 24K dropped by 40 dirhams in a month

The start of the week was marked by a decrease in gold prices in Dubai amid concerns about further interest rate hikes in the US and inflation. According to data from Dubai Jewellery Group, on Monday morning, 24K gold traded at 525.0 dirhams per gram, which is lower than the 527.5 dirhams per gram recorded at the end of trading last weekend.

Similarly, 22K, 21K, and 18K gold showed a decline to 486.0, 466.0, and 399.5 dirhams per gram, respectively. In the spot market, gold fell by 0.45 percent, reaching the mark of $4357 per ounce, while silver remained stable at $66.16 per ounce.

Previously, on Friday, gold had risen by approximately 1 percent, holding around the $4380 per ounce mark. The Federal Reserve raised the interest rate last week, and further increases were anticipated in the coming months.

Simon-Peter Massabni, Head of Business Development at XS.com, noted that the metal recovered after immediate concerns about energy supply disruptions in the Middle East weakened, aided by Saudi Arabia redirecting crude oil exports. This relief allowed gold to withstand the negative impact from the Federal Reserve after the central bank raised rates for the first time in three years.

Tension in the energy market intensified following attacks on a pumping station along the East-West pipeline and an export terminal in the port of Yanbu. These incidents threatened to reduce global crude oil supplies by nearly 4 percent.

News agencies reported that Saudi Arabia successfully rerouted crude oil sales, transporting about 60 million barrels through Ras Tanura and the Omani port of Sohar, located beyond the Strait of Hormuz. This shift restored export volumes to August levels or higher and helped lower crude oil prices from recent peaks.

On Monday morning, oil prices decreased, but they were still trading near the $100 per barrel mark. Massabni added that the drop in energy prices brings critical relief to broader inflationary pressure. Lower crude oil prices help limit bond yields and ease the severe liquidity shortage that previously constrained global capital. As sovereign yields decline, financial capital, especially from Asian and Middle Eastern investors, finds new opportunities to return to gold assets.

A decline in prices for gold and silver is observed in the commodities market. This drop occurred in the domestic market following a significant decrease in the international market.

On the commodity exchange (MCX), the price of gold fell by 230 rupees on October 5, reaching 151,000 rupees per 10 grams. Silver traded at 231,300 rupees per kilogram, showing a decrease of 1,300 rupees.

A decrease in precious metal prices has also been recorded in cities. In Delhi, the price of 24-carat gold dropped by 500 rupees to ₹1,54,230. The price of 22-carat gold in Delhi is ₹1,41,390, and 18-carat is ₹1,15,710. In Mumbai, the prices are as follows: 24 carat — ₹1,54,080, 22 carat — ₹1,41,240, and 18 carat — ₹1,15,560.

A decline was also noted in other towns: in Lucknow, 24-carat gold costs ₹1,54,230, 22-carat — ₹1,41,390, and 18-carat — ₹1,15,710. In Patna, 24-carat gold is valued at 1,54,130 rupees, 22-carat at 1,41,290 rupees, and 18-carat at 1,15,610 rupees.

A downturn is also visible in the global market: the price of gold fell by 0.37% to $4,336.42 per ounce, while silver decreased by 0.60% to $63.775 per ounce.

The main reason cited for the decrease in gold and silver prices is the continuous rise in energy prices. This increase raises concerns about potential interest rate hikes by the Federal Reserve and the Bank of Japan, which leads to a fall in precious metal prices.

Gold prices slightly decreased in Dubai and the UAE on Friday morning. According to data from Dubai Jewellery Group, 24K and 22K precious metal options traded at 522 and 438.5 dirhams per gram, respectively, when the market opened on Friday morning.

The price of 24K gold fell by almost 38 dirhams per gram since August 25th. Among other varieties, 21K, 18K, and 14K dropped to 463.5, 397.25, and 310 dirhams per gram, respectively.

The spot gold rate was $4331 per ounce, which is 0.8 percent lower. Silver decreased by 1.1 percent to $63.6 per ounce.

Simon-Peter Massabni, Head of Business Development at xs.com, noted that gold is undergoing a sharp correction during Thursday's trading. This pressure is caused by the strengthening of the US dollar, rising Treasury yields, and growing expectations that the Federal Reserve will maintain restrictive monetary policy.

He explained that one of the key factors in the decline was the recovery of US Treasury yields. The yield on 10-year bonds returned to 4.90 percent. In contrast, long-term rates remained under pressure after the US government's plan to buy up to $6 billion in long-term debt was lower than some market participants expected. Higher rates increase the opportunity cost of holding gold, which does not generate interest.

Furthermore, the dollar regained ground against major world currencies after recent trading at a two-week low. The combination of higher rates and expectations of sustained high interest rates has once again increased the relative attractiveness of dollar-denominated assets. For gold, a stronger dollar is usually a negative factor because it makes the metal more expensive for investors using other currencies.

Adding to these factors was a sharp rise in oil prices. Brent crude oil once again exceeded the $100 per barrel threshold and traded above $105 during the session, while WTI also rose above $100.

Geopolitical tensions and energy supply risks in the Middle East continue to support high prices, while simultaneously fueling concerns about a new wave of energy-related inflation. Massabni added that the oil rally creates a complex environment for gold. Although geopolitical tension usually supports demand for safe-haven assets, keeping oil prices above $100 may force major central banks to keep interest rates higher for longer. In the short term, this effect outweighs the safe-haven demand, creating additional pressure on precious metals.