Gold prices in Dubai saw a decline at the start of the trading day on Tuesday. The 24K gold variant fell by AED1.5 to AED331.0 per gram. Other variants, including 22K, 21K, and 18K, also opened lower.
This price drop comes after a peak last week during Diwali. The global gold market, including spot gold, has also experienced a decline. Analysts attribute this price dip to market anticipation of the US presidential election and the Federal Reserve’s upcoming policy decision.
Wael Makarem, financial markets strategist lead at Exness, said, “Recent opinion polls show a tight race between Vice President Kamala Harris and former President Donald Trump. The uncertainty could lead to volatility in the next few days as traders react to the election’s results. At the same time, gold could continue to see support if the Federal Reserve keeps cutting rates, although expectations retracted in regard to the pace of monetary policy easing,” reports Khaleej Times.
The Federal Reserve is anticipated to announce a 25 basis point interest rate cut this week, following a more substantial 50 basis point reduction in September. Markets are also projecting another quarter-point cut in December. Wael further noted that ongoing geopolitical tensions in the Middle East could further bolster gold’s appeal as a safe-haven asset, supporting prices alongside persistent demand from central banks and economic uncertainties.
