Insights 
VT 
Gold prices in the United Arab Emirates fell on Friday to AED 467.39 per gram, down from AED 469.58 the previous day. The price for a tola of gold decreased to AED 5,451.41 from AED 5,477.08.
The US Dollar reached its peak since early August, encouraging some profit-taking among XAU/USD bulls. Moreover, a ceasefire between Israel and Hamas was seen as another factor contributing to the fall in gold’s safe-haven demand.
Federal Reserve Updates
Federal Reserve Chair offered no new policy updates, and the September FOMC meeting minutes indicated ongoing inflation concerns. There is anticipation that the US central bank will lower borrowing costs twice more by year-end.
The US government shutdown continues into its second week with no progress towards resolving funding bills. In parallel, geopolitical tensions persist with a Russian assault on Kyiv reported by Ukraine, featuring missile and drone attacks leading to power outages.
Gold’s inverse relationship with the US Dollar and US Treasuries remains noted, with changes in these influencing gold prices. Central banks from emerging economies such as China and India have been increasing their gold reserves significantly.
We are seeing a slight pullback in gold, which appears to be a short-term reaction to a stronger US dollar and news of an Israel-Hamas ceasefire. This dip should be viewed as a potential entry point rather than the start of a new bearish trend. The market is simply taking a breather after a significant run-up.
Fundamental Case for Gold
The fundamental case for gold remains strong, especially with the US government shutdown entering its second week and creating domestic uncertainty. Looking back at the 2018-2019 shutdown, we saw gold rally over 4% during that period of political instability. Current market pricing, reflected in the CME FedWatch Tool, shows a greater than 70% probability of another rate cut before the year ends, which would further support non-yielding assets like gold.
Geopolitical tensions are also providing a solid floor for the price, offsetting any optimism from the Middle East peace talks. The escalating conflict in Ukraine, with recent large-scale assaults on Kyiv, ensures that demand for safe-haven assets will persist. This is reinforced by central bank behaviour, as the latest World Gold Council data shows they collectively added another 260 tonnes to their reserves in the third quarter of 2025, continuing the strong buying trend we saw in previous years.
For derivative traders, this dip presents an opportunity to position for a move back towards the $4,000 resistance level. Buying call options on gold futures or related ETFs offers a way to capitalize on the expected upside while managing risk. The current environment of conflicting headlines is likely to keep volatility elevated, making options a suitable tool for the coming weeks.
