By: Economy Middle east

Gold prices fell on Friday after U.S. inflation data came in below expectations, diminishing bullion’s attractiveness as an inflation hedge, while a stronger dollar added further pressure on prices.

In the UAE, gold rates eased, with 24-carat gold declining AED1.25 to AED521 and 22-carat gold falling AED1 to AED482.5. Additionally, 21-carat gold lost AED1.25 to reach AED462.5, while 18-carat gold edged down AED1 to AED396.5.

Meanwhile, 14-carat gold fell AED0.75 to AED309.25.

Globally, spot gold slipped 0.09 percent to $4,328.16 an ounce as of 6:30 GMT, though it was still on track to finish the week up 0.4 percent. Meanwhile, U.S. gold futures declined 0.22 percent to $4,354.70.

U.S. dollar hovers near one-week high

The U.S. dollar hovered near one-week highs, raising the cost of dollar-denominated precious metals for buyers using other currencies.

The latest data showed that U.S. consumer prices rose 2.7 percent year-on-year in November, which came below expectations for a 3.1 percent increase. Following the release, traders raised their expectations for a Federal Reserve interest rate cut at the January meeting to 26.6 percent from 24.4 percent a day earlier, according to the CME FedWatch tool.

Goldman Sachs expects gold prices to rise 14 percent to $4,900 an ounce by December 2026 under its base-case scenario, the bank said in a note on Thursday, adding that the outlook carries upside risks if diversification demand expands to include private investors.

“Gold is heading into year-end having delivered one of its strongest multi-year performances in modern history. Prices are up more than 60 percent this year alone and more than 110 percent over the past two years combined, placing gold firmly at the center of global asset allocation discussions once again,” said Ole Hansen, head of commodity strategy, Saxo Bank.

Hansen explains that despite the strong momentum, gold is not without risks heading into 2026. In the very near term, the most tangible risk comes from positioning and flows.

“The strong gains in gold and silver during 2025 mean that the upcoming rebalancing of major commodity indices—not least the precious-metal-heavy Bloomberg Commodity Index—will trigger significant selling in futures markets,” he added.

This process, running for five days from 8 January, could generate notable short-term volatility. How well the market absorbs this selling will likely help determine price direction during the first quarter.

Other precious metals

As gold prices declined, the precious metals market was largely up on Friday. Spot silver gained 0.47 percent to $65.73. Silver has gained 125 percent year-to-date, outpacing gold, which rose 65 percent so far this year.

Platinum climbed 1.05 percent to $1,935.90 after reaching a more than 17-year high on Thursday. Meanwhile, palladium gained 0.5 percent to $1,704.19 after touching a near three-year high in the previous session.

Both metals were poised to finish the week higher, with palladium on course for its strongest weekly performance since September 2024.