[Editor's Note: Find out the latest gold prices here.]

Gold prices in Dubai inched lower at the opening of the markets on Thursday as investors turned cautious ahead of the US Federal Reserve meeting.

The Dubai Jewellery Group data showed 24K gold price fell Dh1.25 per gram to Dh505.75 per gram on Thursday morning. Among the other variants, 22K, 21K, 18K and 14K dropped to Dh468.25, Dh449.0, Dh384.75 and Dh300.25 per gram, respectively.

Spot gold was trading at $4,193.1 per ounce, down 0.2 per cent.

Linh Tran, market analyst at xs, in the medium term, the factor that has the greatest influence on gold's trajectory remains the US interest rate cycle.

“As recent data show signs of cooling in US growth and consumption, the market increasingly believes that the Federal Reserve (Fed) will have to begin cutting interest rates in the near future. The decline in bond yields at the end of November to around 4.02 per cent before rebounding to the current level near 4.088 per cent created favourable conditions for gold to strengthen, as the opportunity cost of holding gold decreases,” said Tran.

In addition, historically, every period of declining real interest rates has created a supportive environment for the precious metal, and the current context is repeating that pattern.

“If the Fed indeed enters a rate-cutting cycle in 2026, the upside outlook for gold next year will continue to be reinforced. In my view, gold still has room to set new highs toward $4,500 per ounce, which is a reasonable expectation in a monetary-easing environment that is highly likely to unfold next year,” added Tran.

Alex Kuptsikevich, chief market analyst at FxPro, said investors are playing on the divergence in monetary policy. The Fed is expected to cut rates to three per cent in 2026, whereas the Bank of Japan is forecast a hike rates to 1.25 per cent.

“The anticipation of death is worse than death itself. US President Donald Trump's statement that the new Fed chair will be announced in early 2026, rather than by Christmas as Scott Bessent had previously said, is not helping the dollar. Along with the expectation of Kevin Hassett's arrival at the helm of the Fed, the expected scale of monetary expansion is growing. This is bad news for the US dollar,” he said.

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