By: Economy Middle east

Gold prices declined on Friday as the dollar strengthened amid uncertainty over additional Federal Reserve rate cuts. However, the metal remained on course for its third consecutive monthly gain.

In the UAE, gold rates inched up, with 24-carat gold gaining AED1.25 to AED482.75 and 22-carat gold rising AED1 to AED447. Additionally, 21-carat gold edged up AED1 to AED428.5, and 18-carat gold gained AED1 to AED367.5.

Globally, spot gold was down 0.02 percent to $4,001.61 as of 5:32 GMT. Gold prices have gained 3.9 percent so far this month.

Meanwhile, U.S. gold futures for December delivery fell 0.23 percent to $4,006.70 per ounce.

U.S. dollar index hovers near three-month high

Fed Chair Jerome Powell struck a more hawkish tone this week, offering little support to gold. With the likelihood of a December rate cut now appearing far less certain than before, the U.S. dollar has strengthened, adding pressure on gold prices by diminishing bullion’s appeal from a yield standpoint.

The U.S. dollar index hovered near a three-month high against major peers, making gold more expensive for holders of other currencies.

On Wednesday, the Federal Reserve lowered interest rates by a quarter percentage point for the second time this year, bringing the benchmark overnight rate to a target range of 3.75–4.00 percent.

However, following comments from Powell, traders trimmed back expectations of another rate cut at the Fed’s next policy meeting in December.

At the moment, traders see a 68.9 percent chance of a 25-basis-point rate cut in December, significantly lower than the 91.1 percent chance priced in a week ago, according to the CME FedWatch tool.

Easing trade tensions weigh on gold prices

U.S. President Donald Trump said on Thursday that he had reached an agreement with Chinese President Xi Jinping to reduce tariffs on Chinese goods in exchange for Beijing’s commitment to curb the illegal fentanyl trade, resume U.S. soybean purchases and maintain rare earth exports.

Renewed optimism over a potential easing of trade tensions between the U.S. and China—the world’s two largest economies—has eased support to gold’s safe-haven appeal. At the same time, concerns about economic risks from the ongoing U.S. government shutdown weighed on the dollar earlier this week, limiting bullion’s losses, which is on course to close higher for a third consecutive month.

Q3 was the highest quarter for gold demand on record

The World Gold Council’s Q3 2025 Gold Demand Trends report recently revealed that quarterly gold demand (including OTC) reached 1,313 tons, or $146 billion in value terms, and was the highest quarter for demand on record.

“Gold’s climb towards $4,000/oz in the third quarter underscores the strength and persistence of the factors that have been driving demand throughout the year. Heightened geopolitical tensions, stubborn inflationary pressures and uncertainty around global trade policy have all fuelled appetite for safe-haven assets as investors look to build resilience in their portfolios,” said Louise Street, senior markets analyst at the World Gold Council.

“The outlook for gold remains optimistic, as continued U.S. dollar weakness, lower interest rate expectations and the threat of stagflation could further propel investment demand. Gold has set record after record this year, and the current environment suggests there could be more upside gains for gold. Our research indicates the market is not yet saturated, and the strategic case to hold gold remains firmly in place,” she added.

Other precious metals

As gold prices declined, the precious metals market saw mixed movement. Spot silver was down 0.38 percent to $48.72, while platinum was up 0.28 percent to $1,615.58. In addition, palladium surged 1.17 percent to $1,462.03 on Friday.