Dollar Strengthens: What Falling Gold Prices Mean for Your Investments and Business in Oman
Gold prices fell by more than 1% on Thursday, pressured by a stronger US dollar and diminishing expectations of a Federal Reserve interest rate cut in December, as investors awaited a delayed US jobs report scheduled for later in the day.
At 1104 GMT, spot gold was down 0.6%, trading at $4,055.20 per ounce, recovering some of the earlier 1% decline. Meanwhile, US gold futures for December delivery slipped 0.7% to $4,053.80 per ounce.
The dollar index remained near a two-week high, making gold more expensive for buyers using other currencies. Independent analyst Ross Norman noted, “Dollar firmness is weighing on gold, but the price volatility is typical for this time of year, with profit-taking and book-squaring balanced against early investments ahead of the new year.”
Minutes from the Federal Reserve’s October meeting, released on Wednesday, revealed that the central bank had cut interest rates, though policymakers warned such action could risk entrenched inflation and undermine public trust in the Fed.
Market attention is now focused on the September jobs report, delayed due to the government shutdown, for insights into the Fed’s future policy direction. According to a Reuters survey, nonfarm payrolls for September are expected to have risen by 50,000 jobs, more than double August’s gain of 22,000.
However, much of the relevant economic data will still be unavailable ahead of the Fed’s December 10 meeting, as the next jobs report is postponed until December 16.
Traders have reduced the probability of a rate cut next month to about 34%, down from 49% on Wednesday, according to CME Group’s FedWatch tool.
Gold, which does not yield interest, generally performs well in low-interest-rate environments and during periods of economic uncertainty.
Reflecting this outlook, UBS raised its mid-year 2026 gold price target by $300 to $4,500 per ounce, citing expectations of future Fed rate cuts, ongoing geopolitical risks, and strong demand from central banks and ETFs.
In other metals, spot silver declined 1.4% to $50.66 per ounce, platinum dropped 0.5% to $1,538.85, while palladium rose 1.1% to $1,394.74.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The recent drop in gold prices, driven by a strong dollar and reduced expectations of a Federal Reserve rate cut, signals increased volatility and uncertainty in global markets. For businesses in Oman, particularly in commodities and investment sectors, this calls for cautious portfolio management and exploration of diversification strategies to hedge against currency and interest rate risks. Smart investors should monitor upcoming US economic data closely, as shifts in monetary policy could create opportunities for strategic entry in gold and related assets amid geopolitical and inflation concerns.
