Source: Gulf News
Dubai, August 23, 2025:
Gold prices in Dubai experienced a sudden spike on Friday, hitting nearly Dh4 overnight to Dh376.25 per gram. Prices climbed as world markets reacted to comments made by U.S. Federal Reserve chief Jerome Powell, hinting that an interest rate cut is being considered for September.
The Impact of Widespread Changes Strengthens Gold
Gold prices tend to increase following U.S. interest rate cuts. A common outcome of a U.S. interest drop is a weaker dollar. When the dollar falls, more investors tend to buy gold as a safe haven, which raises the price of gold. This pattern has repeated many times over the past five years, which has added to gold’s stature as a sound investment.
The effect was quickly visible in Dubai. Up until Thursday, the price was flat at Dh372.25 per 1 gram allowing buyers some flexibility after a month of chaos. However, Powell’s signal regarding the interest rate was enough to trigger an abrupt
Buyers Fear Dh380 and More
For shoppers, particularly jewelry shoppers in September, this news is not great. They fear the prices will be over Dh380 per ounce and jewelry will become more expensive.
A Dubai-based jeweller explained the concern:
“Next week will show whether there will be another surge towards Dh380 or over levels for the Dubai gold rate,” a statement by a jeweller. “From mid-September, the tourists and business travellers will return, and there could also be demand from weddings. “Anything over Dh380 will be a major blow for jewellery demand.”
August Trends Provide Mixed Signals
In the first ten days of August, gold prices in Dubai ranged from Dh377 to Dh379 per gram. Retailers weren’t too concerned at the time, since resident shoppers were away on summer breaks and tourist buying was slow. The uneventful month shielded them from bigger problems caused by higher prices.
Currently, in the face of potentially higher demand seasonality, things could change. Retailers feel that they may see a reduction in buying if prices keep going up because consumers may not want to spend on jewellery at this point in time, particularly those consumers purchasing wedding gifts.
Will Prices Settle Next Week?
Some traders are hopeful that the rapid increase was an “over-reaction” to Powell’s commentary to normalize back around Dh373-Dh375 per gram. However, many in the market concede that it is more hope than expectation.
Globally, gold prices were also up, increasing by more than $30 and reaching $3,372 per ounce. This price will provide the basis for next week’s trading and add more uncertainty to the outlook.
Looking Forward: The next couple of weeks will be very important for Dubai’s gold market. If rates go over Dh380 per gram, jewellery demand could drop off considerably just as tourists return and wedding-related buying increases. Both customers and retailers are following the prices closely to see if the market stabilizes before the busy season begins.
