On Tuesday morning, gold prices in Dubai dropped below the 500 dirham mark. Over the past month, the precious metal has lost 30.5 dirhams.
Specifically, the 24K variant traded at 497 dirhams per gram, which is below the 500.50 dirhams level recorded at the close of trading on Monday. Other varieties, such as 22K, 21K, 18K, and 14K, also showed declines, trading at prices of 460.25, 441.25, 378.25, and 295 dirhams per gram, respectively.
Globally, spot gold rose by 0.07 percent, reaching $4143.48 per ounce. Silver increased by 0.52 percent, trading at $57.44 per ounce.
Gold's weekly return remained more stable, showing a drop of 0.70 percent on Monday, while silver faced pressure, falling by 6.33 percent. Financial analyst and Chief Investment Officer of Century Financial, Vijay Valecha, commented on this situation.
Following comments from US Federal Reserve Chairman Kevin Warsh at the annual IMF meeting in Bangkok, gold recovered above the $4180 mark as traders adjusted their expectations regarding interest rate hikes.
Valecha noted that Warsh made no statements about the results of the Fed meeting this month, causing the probability of a rate hike in October to decrease from 21 percent last week to 12.7 percent.
He also explained that this negatively affected US Treasury bonds across the yield curve, contributing to the recent weakness of the US dollar and supporting the non-yielding metal. Furthermore, oil prices fell from monthly highs after US President Trump canceled sanctions and tariffs on Russian energy to keep Moscow at the negotiating table on Ukraine.
According to Valecha, this weakened inflation concerns and expectations of tighter Fed policy. Gold also attracted demand for capital preservation amid concerns raised by artificial intelligence investments, which triggered stock sell-offs and bond yield declines.