Gold prices in Dubai dropped below the Dh500 mark on Tuesday, September 29, for the first time in more than seven weeks. As of 12.45pm, 24-karat gold was trading at Dh497.25 per gram, while 22-karat stood at Dh460.50 per gram.
The decline followed Monday's opening prices of Dh505.50 for 24-karat and Dh468 for 22-karat, marking drops of Dh8.25 and Dh7.50 per gram respectively in a single trading day. Zooming out to the month as a whole, 24-karat gold has now fallen Dh44.75, or roughly 8.3 per cent, from its September 3 peak of Dh542 per gram, while 22-karat has slipped Dh41.50 from its own high of Dh502.
Analysts point to growing expectations of another US Federal Reserve interest rate hike as the main driver behind the slide. Higher rates tend to weigh on gold because the metal pays no yield, making interest-bearing assets comparatively more attractive to investors as borrowing costs climb.
Internationally, spot gold recovered slightly to around $4,144 an ounce on Tuesday after touching a seven-week low a day earlier. Markets are currently pricing in roughly a 70 per cent probability of a further Fed rate increase in October.
For buyers in Dubai, the pullback offers a rare window to purchase gold at some of the lowest rates seen since early August, though the Fed's next policy decision is likely to set the tone for prices in the weeks ahead.