Dubai Gold Prices Plummet Ahead of Peak Sales Seasons

Gold prices in Dubai took a hit on August 31, as rates dropped across all major categories. The decline comes ahead of Navratri and Diwali, typically peak seasons for gold jewelry sales among Indian consumers in the UAE.

According to the Dubai Jewellery Group, 24-carat gold lost Dh 3.75 per gram, falling to Dh 533.00 from Dh 536.75 in the previous trading session. Other categories also saw significant decreases: 22-carat gold dropped to Dh 493.75 per gram (from Dh 497.00), while 21-carat and 18-carat gold fell to Dh 473.25 (from Dh 476.75) and Dh 405.75 (from Dh 408.50) respectively.

The drop in gold prices is largely attributed to international market pressures, with traders pricing in a higher chance of US interest rate hikes. Federal Reserve Chair Kevin Warsh's recent comments contributed to this shift, as markets adjusted their expectations for inflation and Fed action. The stronger US dollar also put pressure on gold prices.

Spot gold fell 0.7 per cent to USD 44,423.84 per ounce by 0204 GMT, its lowest level since August 19, after losing more than 3 per cent on Friday. Independent analyst Tai Wong told Reuters that 'gold is getting slapped hard as Chair Warsh affirms that inflation isn’t meaningfully slowing and the Fed has ‘work to do’.