Gold prices in the United Arab Emirates fell on Tuesday, according to FXStreet. The price per gram decreased from AED 514.35 to AED 512.39, and the price per tola decreased from AED 5,999.31 to AED 5,976.43. The US Dollar gained strength for the third consecutive day, impacting Gold prices during the Asian trading session. Easing tensions between the US and China also lowered demand for Gold, which is typically seen as a safe investment.

US Trade Policies and Federal Reserve Expectations

US trade policies took center stage, with potential tariffs on China approaching 155% if no agreement is reached. However, expectations for a 25-basis-point rate cut by the Federal Reserve in October and December may support Gold prices amid economic uncertainty. The US government shutdown is now in its third week, affecting market conditions as the Senate failed once again to vote on reopening. Geopolitical tensions are evident, notably with Ukraine firmly rejecting Russia’s demand regarding Donetsk Oblast. Traders are waiting for upcoming US consumer inflation figures, which could influence the Federal Reserve’s rate decisions. FXStreet adjusts Gold prices in the UAE based on international rates using local currency and units, although actual rates may vary slightly. In 2022, central banks worldwide purchased 1,136 tonnes of Gold, showing a tendency to rely on it during uncertain times. Gold prices generally move in the opposite direction of the USD and fluctuate based on geopolitical and economic factors.

Recent Market Trends

Gold prices are currently volatile, sitting around AED 685.20 per gram, reminiscent of daily dips from previous years. A stronger US Dollar is exerting pressure on Gold, a trend that has historically affected prices. This short-term weakness might provide opportunities for derivative traders to prepare for future uncertainties. In the past, aggressive Federal Reserve rate cuts acted as a boost for Gold prices. Today’s scenario is more complicated, with the CME FedWatch tool indicating an 85% chance that interest rates will remain stable until early 2026. This ongoing “higher for longer” approach from the Fed is limiting significant price increases for now. Geopolitical risks have changed, but their effect on Gold as a safe haven continues. While broad tariff threats from the Trump administration have lessened, tensions between the US and China over technology and resources still cause market anxiety. The unresolved conflict in Ukraine, now ongoing for a long time, adds another layer of uncertainty that encourages holding defensive assets. Traders are closely monitoring this week’s US consumer inflation figures, as the latest Consumer Price Index (CPI) reading of 3.1% remains above the Fed’s target. Despite daily market fluctuations, a strong long-term trend of central bank accumulation persists, with over 800 tonnes added to global reserves this year. This strategic buying supports Gold prices and indicates a move away from reliance on the US Dollar. Create your live VT Markets account and start trading now.

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