Weak U.S. job growth reinforces the case for a Fed rate cut, impacting gold prices globally.
Gold prices reached a new high on Tuesday, driven by a weaker dollar and a decline in bond yields amid increasing speculation for a Federal Reserve rate cut this month, which boosted demand for the precious metal.
In Dubai, gold rates saw a modest uptick compared to the previous day. The price of 24-carat gold decreased by AED1.24, settling at AED438.94 per gram. In contrast, 22-carat gold rose by AED1.13 to AED402.36 per gram, while 21-carat gold increased by AED1.08, now priced at AED384.07 per gram. Additionally, 18-carat gold saw a rise of AED0.92, bringing its price to AED329.20 per gram.
On a global scale, spot gold advanced 0.53 percent to $3,655.49 per ounce. U.S. gold futures for December delivery gained 0.45 percent to $3,693.75.
U.S. job growth weakened significantly in August, with the unemployment rate climbing to a nearly four-year high of 4.3 percent, indicating a softening labor market and reinforcing the case for a Fed rate cut next week. Traders are pricing in an 89.4 percent chance of a 25-basis-point Fed rate cut at this month’s meeting and a 10.6 percent probability of a larger 50-basis-point cut, according to the CME Group’s FedWatch tool. Lower interest rates exert pressure on the dollar and bond yields, enhancing the attractiveness of non-yielding bullion. The dollar index fell to its lowest level in nearly seven weeks against its rivals, making gold more appealing for holders of other currencies, while the benchmark U.S. 10-year Treasury yield dropped to a five-month low.
Read more: Dubai 24-carat gold price today dips slightly to AED431.83, U.S. rate-cut prospects keep global rates steady
Meanwhile, the European Central Bank is widely anticipated to maintain rates at its meeting on Thursday. Investors are now looking forward to the U.S. producer price data on Wednesday and the consumer price report on Thursday for additional insights into the Fed’s policy direction. Gold prices have surged 38 percent so far this year, following a 27 percent increase in 2024, supported by a weak dollar, robust central bank accumulation, dovish monetary policies, and heightened global uncertainty. In other markets, spot silver gained 0.1 percent to $41.36 per ounce, platinum rose 1 percent to $1,396.42, and palladium climbed 1.4 percent to $1,149.47.
Additional market analysis from the World Gold Council’s latest Gold Demand Trends report for Q2 2025 highlights continued strong central bank purchasing, with global official gold reserves increasing by 238 tonnes year-on-year, the highest quarterly growth in over a decade. Notably, Central Banks in the Middle East and Asia-Pacific regions accounted for the majority of the additions, reflecting ongoing diversification away from dollar assets amid geopolitical tensions. The report also underscored sustained investment demand, particularly from exchange-traded funds (ETFs), which added 132 tonnes in Q2, pushing total holdings to historic highs. Meanwhile, Jewelry demand showed resilient growth, climbing 11 percent year-on-year, driven largely by consumer appetite in India and China, according to data from the World Gold Council and McKinsey & Company.
From a macroeconomic perspective, the International Monetary Fund’s Global Financial Stability Report (April 2025) projects continued volatility in currency markets, with the U.S. dollar expected to weaken further by the end of 2025 amid divergent monetary policy paths between the Federal Reserve and other major central banks. This backdrop supports gold’s role as a hedge against currency risk and inflation. Moreover, the latest commodities report from the U.S. Geological Survey (USGS) published in August 2025 reveals tightening supply conditions in key gold-producing countries such as South Africa and Russia, adding upward price pressure amid sustained demand.
In the Gulf Cooperation Council (GCC), the Dubai Multi Commodities Centre’s (DMCC) Gold Market Review for H1 2025 showed robust trading volumes, with Dubai gold bar imports rising 18 percent year-on-year, supported by increased refining activities and expanding retail demand across the UAE. The report links this surge partly to regional investors hedging against inflation as consumer prices in the GCC rose by 4.7 percent year-on-year in July 2025, according to the Gulf Cooperation Council Statistical Center (GCC-Stat). This inflationary pressure encourages continued interest in gold as a store of value in the region.
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