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Gold prices in Dubai dropped Dh3.5 per gram on Tuesday morning after hitting a six-week high on Monday.

The Dubai Jewellery Group data showed 24K gold prices in the Emirates trading at Dh508.25 per gram, down from Dh511.75 per gram at the close of markets on Monday.

Among the other variants of the precious metal, the prices of 22K, 21K and 18K gold slipped to Dh470.75, Dh451.25 and Dh386.75 per gram, respectively. The price of newly-introduced 14K fell Dh2 to Dh301.75 per grams on Tuesday.

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The UAE is today celebrating its 54th National Day – also known as Eid Al Etihad. Globally, spot gold was trading at $4,225.35 per ounce, down 0.38 per cent.

Rania Gule, senior market analyst for Mena at xs, said the gold price of $4,250 signals a strategic repositioning by investors in anticipation of a more flexible monetary phase in the coming weeks.

She noted that the broad weakness in the US dollar is providing a key pillar of support for this rally, forming both a technical and fundamental driver that cannot be ignored in explaining gold's stability above sensitive levels.

“Markets currently expect, with an 87 per cent probability, that the Federal Reserve will cut interest rates by 25 basis points in the December meeting. These expectations are not extraordinary; rather, they reflect consistency between economic indicators and policy direction. Recent economic data points to clear deceleration, inflation is on a downward path, and political tensions within the US administration make it more difficult to maintain a strictly hawkish stance,” added Gule.

Therefore, the current weakness of the dollar is not temporary - it reflects a deeper shift in policy expectations,” she added.

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