Gold prices consolidate in Dubai after weekly drop as investors assess US jobs data and Fed outlook

Dubai: Prices of the yellow metal are in a consolidation phase with spot gold trading at $4150 levels after its biggest weekly drop of 3.4 percent since June. Investors are assessing how softer US hiring and rising bond yields could shape the Fed's next moves on interest rates.

In the UAE, those looking to buy gold might see some respite from mid-September levels. 24-karat gold is trading below the Dh500 mark at Dh498 per gram. 22-karat is now priced at Dh461 whereas 18-karat can be bought for Dh379 per gram. It's the lightweight jewellery made of 14-carat that might see many takers as the cost of that has fallen to Dh295.50 on Monday.

US employers added just 29,000 jobs in September, figures released on Friday show, missing the lowest estimate in a Bloomberg poll of economists. The weak print eased pressure on the Fed to lift borrowing costs quickly to tackle stubborn inflation. Markets now see roughly a 20% chance of an October hike, down from about 70% a week earlier. Gold offers no yield, so rising interest rates usually weigh on demand for it.

Inflation pressures remain, however, oil rose as the Middle East conflict continued to widen. In the latest, Yemen's Saudi-backed leaders have launched an offensive to retake all territory held by the Iran-backed Houthis. Treasury Secretary Scott Bessent played down concerns over high borrowing costs, saying they match global trends, even after some rates hit their highest in more than two decades.

Worries about inflation fueled by energy costs and possible US rate hikes pushed gold down over 6% last month. Fed policymakers, however, have downplayed the odds of an imminent increase. The record of the Fed's September meeting, when it lifted rates for the first time in three years, is due midweek and may offer hints on what comes next.

Currently, spot gold is trading slightly higher by 0.3 per cent at $4,151.92 levels. Silver rose 1.3 per cent to $61.45 an ounce, rebounding from last week's drop of more than 6 per cent, its steepest since mid-July. Platinum and palladium also moved higher. The dollar gauge from Bloomberg barely moved, following three consecutive weeks of increases.