Gold prices in Dubai fell on Wednesday morning, with 24-karat gold down AED 2.50 per gram since the start of the week and AED 10.75 over the past month. The decline coincided with Diwali-related buying.

At the start of trading on Wednesday, 24-karat gold was priced at AED 486.50 per gram in Dubai, down from AED 489 at Tuesday’s close.

Prices for other gold purities were quoted as follows:

- 22-karat gold: AED 450.50 per gram
- 21-karat gold: AED 432 per gram
- 18-karat gold: AED 370.25 per gram
- 14-karat gold: AED 288.75 per gram

Global gold and silver prices decline

Gold prices also fell in global markets. As of 9:40am UAE time, spot gold was down 0.66 per cent at $4,034.46 an ounce.

Silver fell 0.98 per cent to $53.92 an ounce.

US midterm elections and the outlook for gold

With the US midterm elections approaching in November, market analyst Maxwell said the outcome could affect financial markets and the outlook for gold.

He said that if the elections result in a divided Congress, reduced expectations of fiscal expansion could push bond yields lower and weaken the US dollar.

Maxwell added that under such conditions, the outlook for gold could strengthen beyond a temporary rise in safe-haven demand in the days leading up to the elections.

However, he warned that persistent inflation and the US Federal Reserve’s restrictive stance could keep real yields elevated and limit a recovery in gold prices.

According to Maxwell, a stronger signal of an emerging upward trend would come when gold begins setting higher price peaks while real US Treasury yields and the US Dollar Index (DXY) decline.

November 3: A key factor facing markets

The US midterm elections will be held on November 3 and, according to Maxwell, could become a major driver of financial markets as investors assess how a potential shift in control of Congress could affect fiscal policy, inflation and interest rates.

He stressed that the market’s main reaction may depend less on which party wins and more on how far the actual result differs from the expectations investors have already priced into assets.