By: Economy Middle east

Gold prices rose on Monday primarily due to expectations of an imminent interest rate cut by the U.S. Federal Reserve. Weak U.S. job data and cooling inflation have increased the probability of a September rate cut to over 90 percent, which reduces the opportunity cost of holding non-yielding assets like gold. This dovish monetary policy stance is a strong driver for higher gold prices globally, including in Dubai. Additionally, ongoing robust buying by central banks, especially in Asia, continues to support demand and strengthen prices.

In Dubai, gold rates showed a slight increase compared to the previous day, with 24 carat gold priced at AED419 per gram, 22 carat at AED388 per gram, 21 carat at AED372 per gram, and 18 carat at AED318.75 per gram. This reflected a steady upward trend in the local market, influenced by global gold price movements.

Globally, gold prices also rose, with the international benchmark price reaching approximately $3,471 per troy ounce on the same day, marking a 0.64 percent increase from the previous day and a continued bullish momentum since early 2025.

Read more: Dubai 24-carat gold prices climb to AED410.75 on weaker dollar, Fed rate cut hopes

Global market gains

Globally, the gold market experienced moderate gains. On September 1, 2025, the COMEX price for gold stood between $3,300 and $3,534 per ounce, with analysts forecasting potential retests of record highs if conditions such as Federal Reserve rate cuts materialize. The overall global market sentiment remains bullish, with strong support from factors such as ongoing central bank gold purchases, geopolitical uncertainties, and inflationary concerns that boost gold’s safe-haven appeal. Expert forecasts from major banks like Goldman Sachs and J.P. Morgan predict gold prices could climb further, with year-end targets reaching up to $3,700 per ounce.

The drivers behind this gold price strengthening include expectations of a Federal Reserve interest rate cut, which reduces the opportunity cost of holding non-yielding assets like gold. Additionally, central banks, particularly in Asia, continue to buy gold, supporting demand. Geopolitical tensions and economic uncertainties maintain gold’s role as a safe investment. In India, the gold market is also exhibiting bullish trends, aided by a weaker rupee which amplifies global price movements.