The gold prices fell slightly on Tuesday, with the U.S. dollar remaining strong around its three-month highs, and investors responded to mixed signals by the Federal Reserve on future interest rate reductions.
Gold has fallen below the $4,000 mark after reaching a historic high of over $4,300 per ounce in October, an event that was similar to the market correction of a spectacular run that the market had experienced earlier this year.
Gold rates in the UAE took a slight downward trend, the cost of 24-carat gold reduced by AED3.50 to reach AED480.25.
Therefore, 22-carat gold plummeted by AED3.25 and is currently selling at AED444.75. Moreover, 21-carat gold fell by AED3.00 to AED426.50, and 18-carat gold also declined by AED3.00 and stood at AED365.25.
Spot gold lost about 0.55 percent and stood at roughly 3,979.47 per ounce on Tuesday, and U.S. gold futures to be delivered in December fell 0.57 percent to approximately $3,990.55 per ounce.
It was a downward change following the soaring rise of the metal, gaining over 55 percent in a year, due to the intense buying by institutions and retail investors, who were looking for safe-haven assets, despite prevailing economic uncertainties and geopolitical tensions.
One of the biggest consumers of gold in the world, India, the prices of 24K gold dropped slightly to INR12,246 per gram, with the price of 22K and 18K gold standing at INR11,225 and INR9,184 per gram.
However, with the slight downturn, the demand was propelled by the festive and wedding months, which made the market rather stable in the context of sluggish international momentum.
The strength of the U.S. dollar is one of the key drivers of the trend in the price of gold in the recent past. Markets were widely anticipating further easing of the markets, following two cuts in interest rates by the Federal Reserve earlier in the year.
The Federal Reserve Chair Jerome Powell has, however, recently implied that another rate cut is “not a foregone conclusion,” which has made the market participants revise their expectations.
The chances of further reduction of the rates in December are now at about 65 percent, a drop in comparison to over 90 percent before Powell made his statements.
An appreciation of the dollar normally exerts a negative pressure on the price of gold because bullion is quoted in U.S. dollars, and thus it becomes more costly to the holders of other currencies.
A strengthening of the dollar over other major currencies, such as the euro, has also helped the gold to fall below the levels it was in October when it reached a high of $4,381.21.
The month of October 2025 was a time when volatility was at an all-time high, and gold was trading at an all-time high.
The rise of the metal since approximately $2000 per pound per ounce down to the current market at about $4,321 in approximately 18 months is among the fastest bull runs ever witnessed, not only by the retail investors but by the large central bank purchases that took place worldwide, indicating a diversified geographic demand.
The recent price correction of approximately 10 percent at the peak is witnessed to be a case of profit-taking and not an indication of weakness.
Analysts highlight high technical support levels, which persist and indicate that there is bullish momentum to continue in the medium term.
Similarly, the interplay with the U.S. dollar and the Fed policy plays a significant role in the future. The U.S. Dollar Index has been tracked by many analysts, and recently, it entered monthly highs of 99.4 and is now near the threshold of 100.
The index is on a prolonged run that may increase bearishness in gold, particularly when the Fed indicates a more hawkish approach.
