Gold prices are experiencing a downward trend as elevated crude oil prices reignite concerns over inflation, potentially prompting the Federal Reserve to reconsider its stance on pausing interest rate hikes in the upcoming decision. Gold remained steady at $4,140 an ounce following a decline of 0.6 percent the previous day. Oil remained close to its highest level in five months as Iran cautioned that it has “no choice” but to assert authority over the Strait of Hormuz. US lawmakers also opposed Trump’s agreement to export diesel to Russia.

In the UAE, prices have decreased by Dh2-5 overnight. 24-karat gold is currently trading at Dh497, below the Dh500 mark. The price for 22-karat gold stands at Dh460.25, while 18-karat gold is valued at Dh378.25. Additionally, 14-karat gold is priced at Dh295 this Tuesday. As India observes Dussehra today, expatriate shoppers in the UAE may find themselves enjoying favourable pricing, which has remained lower than levels seen in the preceding fortnight. Traders are analysing the Federal Reserve’s forthcoming actions as it endeavours to manage inflationary pressures.

Chair Kevin Warsh utilised the evening prior to the pre-meeting communications blackout, ahead of next week’s assembly, to indicate support for maintaining rates at their current level. Odds of a quarter-point hike have decreased to below 20 percent, a significant drop from the two in three probability observed late last month. Gold has predominantly remained above $4,100 this October, stabilising following a decline of over 6% in September, despite a stronger US dollar and high bond yields. It remains approximately 20% lower than the levels observed at the onset of the US-Iran conflict in late February, with traders continuing to factor in a 90% probability of an additional rate increase by the end of the year.

Elevated borrowing costs exert pressure on gold, given that it yields no interest. Spot gold eased 0.1 percent to $4,140.91 an ounce as of 09:30 a.m. in Dubai, while silver gained 0.25 percent to $57.28 an ounce. Platinum and palladium experienced a minor decline. The Bloomberg Dollar Spot Index, which tracks the greenback, exhibited minimal movement following a 0.1 percent increase in the prior session.