Dubai witnessed a decline in gold prices on Wednesday as bullion faced a global correction. The recent record-breaking rally prompted investors to reassess positions amid a stronger US dollar and cautious signals from Federal Reserve officials.
In the UAE, 24-karat gold fell to Dh475.25 per gram, down Dh8 from Monday. The widely traded 22-karat category dropped to Dh440 per gram from Dh448 earlier in the week. Meanwhile, spot bullion steadied near $3,940 an ounce after a nearly 2% decline in the previous session.
The US dollar extended its rally for a fifth consecutive day, putting additional pressure on bullion. Global equity markets also weakened after experiencing the steepest monthly sell-off recently. Investors moved cautiously across major commodities, seeking safer assets.
Federal Reserve policymakers signaled a careful approach to interest rates. Three Fed officials declined to support another cut in December, citing the need to balance persistent inflation with a softer labor market. Traders now look to upcoming speeches by St. Louis Fed President Alberto Musalem and Cleveland Fed chief Beth Hammack for guidance.
Gold has gained roughly 50% this year, reaching record highs last month before easing. The recent correction coincided with redemptions from gold-backed exchange-traded funds, indicating that the rally had accelerated too quickly. Investors now weigh whether the pullback has ended or if further consolidation is likely.
Experts emphasized that currency strength and risk sentiment are key factors influencing bullion demand. They noted that geopolitical uncertainties, inflation expectations, and global economic data will continue to guide investor decisions.
Looking ahead, analysts expect bullion to remain a reliable hedge against volatility. Short-term fluctuations may persist, but long-term prospects are supported by ongoing demand for safe-haven assets. Investors across the Gulf are advised to monitor international trends while factoring in local pricing dynamics. The correction provides both caution and potential opportunity for market participants.
