Gold prices saw a decline on Monday as investors took profits following a significant rise in the previous session, spurred by weaker-than-anticipated U.S. jobs data that heightened expectations for a Federal Reserve interest rate cut in September.
In Dubai, gold rates witnessed a decline, with 24-carat gold dropping to AED405.25 and 21-carat gold decreasing to AED375.25. Additionally, 21-carat gold fell to AED360.00, while 18-carat gold dropped to AED308.50.
Spot gold fell by 0.3 percent to $3,354.17 per ounce as of 02:29 GMT (currently trading above $3,361). Bullion had surged more than 2 percent on Friday. Meanwhile, U.S. gold futures rose by 0.2 percent to $3,407.10 (currently trading above $3,412).
Asian markets mirrored Wall Street’s decline as concerns about the U.S. economy resurfaced, leading investors to anticipate an almost certain rate cut in September and undermining the dollar. Last week, U.S. job growth decelerated more than expected in July, with nonfarm payrolls increasing by 73,000 jobs last month, following a downwardly revised increase of 14,000 in June, as reported by the Labor Department’s Bureau of Labor Statistics. This revived optimism for a Fed rate cut in September, with markets now estimating an 81 percent probability, according to the CME FedWatch tool.
Vijay Valecha, chief investment officer, Century Financial, remarked to Economy Middle East, “The significant rise in prices came in after a weaker than expected jobs report, as evident by the Nonfarm Payrolls coming in at 73K compared to expectations of 106K, Moreover, earlier readings for June were revised lower, adding to the pressure on the U.S. labor market. This helped to boost demand for the safe haven metal. Amid political pressure on the Fed to lower interest rates, Fed Governor Kugler announced her resignation from the central bank position. This might revive fears of the central bank’s independence, keeping a lid on any meaningful gains in the U.S. Dollar, boding well for the non-yielding bullion. On top of that, rising geopolitical risks with escalating tensions between U.S. and Russia would limit further depreciation of the commodity.”
“From a technical standpoint, Gold’s bounce from the 100-day SMA last week seems to be supporting a rangebound market structure for prices. However, after a strong bullish candle on Friday with prices crossing above the 50 SMA on the daily chart, along with the 100-SMA on the 4-hour chart, it is supporting short-term bullishness. A definitive move above the highs of 16th July near $3,377 could see prices touch the next resistance near $3,391. On the downside, prices could see support near the lows of 30th July at $3,268 levels,” Valecha further noted.
U.S. tariffs remain in effect
The tariffs imposed by U.S. President Donald Trump last week on numerous countries are expected to remain in effect rather than be reduced amid ongoing negotiations, Trade Representative Jamieson Greer stated in comments aired on Sunday.
Gold, often viewed as a safe-haven asset during periods of political and economic uncertainty, tends to flourish in a low-interest-rate climate. Spot silver fell by 0.6 percent to $36.80 per ounce, platinum decreased by 0.6 percent to $1,307.02, and palladium softened by 0.9 percent to $1,197.76.
Reuters reported on Monday that Citi has raised its gold price forecast for the next three months to $3,500 per ounce on Monday from $3,300, and adjusted the anticipated trading range to $3,300–$3,600 from $3,100–$3,500, based on the belief that the near-term U.S. growth and inflation outlook has weakened. “U.S. growth and tariff-related inflation concerns are set to remain elevated during 2H’25, which alongside a weaker dollar, are set to drive gold moderately higher, to new all-time highs,” the bank stated. Citi also pointed out that weaker U.S. labor data in the second quarter of 2025 has raised concerns regarding institutional credibility related to the Federal Reserve and U.S. statistics, along with increased geopolitical risks stemming from the Russia-Ukraine conflict.
Citi estimates that gross gold demand has risen by over one-third since mid-2022, nearly doubling prices by the second quarter of 2025.
Read more: Dubai 24-carat gold price today falls to AED396.75, sees weekly loss on stronger dollar
Global gold demand surges
According to the World Gold Council’s Q2 2025 report, global gold demand (including over-the-counter trading) rose 3 percent year-over-year to 1,248.8 metric tons, largely driven by a remarkable 78 percent increase in investment demand. This helped gold’s price surge by 26 percent in the first half of 2025, peaking at an unprecedented $3,500 per ounce in April. The demand value jumped 45 percent to $132 billion, marking a new historical high. This surge in investment appetite has compensated for a 14 percent slump in physical gold jewelry demand, which fell to 410 tons – its lowest since the pandemic black spot of 2020, particularly affecting major consumers like China and India. The report also highlights that physically backed gold ETFs experienced their highest annual inflows since the first half of 2020, as central banks accelerated their gold reserve accumulations, contributing to market tightness.
Looking at the U.S. labor market, the July 2025 jobs report showed only 73,000 jobs added, with significant downward revisions to the prior months, indicating the weakest three-month average job growth since the pandemic. The unemployment rate held at 4.2 percent, but labor force participation slipped, painting a picture of overall stagnation. Analysts at Principal Asset Management and CNBC noted that these numbers signal a market not keeping pace with population growth and highlighted the growing negative impact of recent U.S. tariffs and shifting trade policies.
Volatile interest rate expectations
Interest rate expectations remain volatile. According to the CME FedWatch Tool as of August 2025, market odds for a September Fed interest rate cut oscillated between 40 percent and 90 percent last week, reflecting how quickly investor sentiment reacts to macroeconomic data and Fed communications. Most major banks, including Goldman Sachs and JPMorgan, now expect several rate cuts before the end of the year, with many forecasting the federal funds rate to drop to a 3.5 percent–3.75 percent target range by December.
The persistent strong demand for gold is also driven by heightened geopolitical risk, namely the ongoing Russia-Ukraine conflict. The World Gold Council, trading platforms, and analysts at Goldman Sachs all note that as geopolitical instability intensifies, so does safe-haven flow into gold, further supporting global prices. Military escalations, such as recent drone strikes and retaliatory assaults, have rattled markets and prompted global investors to seek shelter in gold, evidenced by price spikes in response to headline events.
Forecasts remain bullish for gold despite recent volatility, with J.P. Morgan Research now expecting gold to average $3,675 per ounce by Q4 2025 and potentially approaching $4,000 in 2026 as macroeconomic and geopolitical drivers persist. The World Bank’s latest projection, available through their commodities market outlook, is more conservative, with an average gold price target of $2,050 per ounce in 2025, anchored on the scenario that major conflicts could ease but economic stresses and safe-haven demand will remain elevated.
