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Gold prices in Dubai edged down on Friday, tracking global market sentiment influenced by a stronger U.S. dollar and steady interest rates from the Federal Reserve. The yellow metal is on course for a weekly decline, despite ongoing trade uncertainties that typically support bullion prices.
In Dubai, 24-carat gold dropped by AED1.5 to AED396.75 per gram. Similarly, 22-carat gold fell to AED367.50, 21-carat gold declined to AED352.50, and 18-carat gold slipped to AED302.00.
Globally, spot gold held firm at $3,292.18 per ounce early Friday and is now hovering above $3,296. However, the metal is down by 1.3% this week. U.S. gold futures also dipped 0.2% to $3,342.10. The dollar index surged to its highest level since May 29, making gold costlier for holders of other currencies.
Fed Policy Holds, Tariffs Imposed
On Wednesday, the U.S. Federal Reserve decided to maintain interest rates between 4.25% and 4.50%, dashing hopes for a rate cut in September. Fed Chair Jerome Powell emphasized persistent inflation and the impact of recent tariffs as reasons for the central bank’s cautious approach.
On Thursday, former President Trump signed an executive order to impose “reciprocal” tariffs between 10% and 41% on imports from several countries. Canada was hit hardest, with tariffs on goods not covered under the U.S.-Mexico-Canada Agreement rising from 25% to 35%. Mexico received a 90-day grace period to negotiate.
Inflation Rises, Eyes on U.S. Jobs Data
U.S. inflation accelerated to 2.7% in June from 2.4% in May, largely due to tariffs driving up import costs in sectors like appliances, clothing, and toys. All eyes are now on the U.S. jobs report, expected later in the day, which could further influence the Fed’s rate path.
Gold, which doesn’t yield interest, typically performs better in low-rate environments. However, with the Fed holding steady and the dollar gaining strength, bullion faces downward pressure.
Other Precious Metals Also Down
Spot silver fell 0.3% to $36.63 per ounce.
Platinum held steady at $1,288.70.
Palladium rose slightly by 0.4% to $1,195.91.
Despite the slight gains in palladium, all three metals are heading for weekly losses.
The World Gold Council’s mid-year report shows gold surged 26% in the first half of 2025, but momentum has cooled as rate hikes and a strong dollar return to the spotlight.
