Gold prices in Dubai: Following a post-Diwali dip, gold prices in the UAE have comfortably settled below the key Dh500 mark for a second consecutive day, offering a welcome window for buyers. In Dubai, the weekend saw 24-karat gold priced at Dh495.50 per gram, while 22-karat gold was at Dh458.75. The markets showed some intraday movement, with prices briefly dipping even lower to Dh490 and Dh454, respectively, earlier on Friday.
Local retailers report that consumer demand remains steady, noting that shoppers are quickly adapting to these new, more attractive price levels after a prolonged period of record highs.
The local trend mirrors the global landscape, where gold prices stabilized after a significant 6% drop over the previous two sessions. This pullback reflects a shift in investor sentiment as the market reassesses the recent historic rally. Renewed optimism around a potential US-China trade deal has eased some geopolitical fears, temporarily reducing the appeal of traditional safe-haven assets like gold.
This period of adjustment has been marked by increased market activity. Data shows traders are actively hedging against further price swings, with volatility measures hovering near their highest levels since 2022. The sell-off also triggered a sharp outflow from gold-backed exchange-traded funds, which, according to Bloomberg, recorded their largest single-day decline in holdings in five months.
Analysts See a “Healthy Consolidation”
Despite the dip, many experts view this as a natural market correction rather than a long-term downturn. Carsten Menke, Head of Next Generation Research at Julius Baer, suggests keeping the decline in perspective.
“Gold remained most resilient, relatively speaking, even though such a steep sell-off is rather unusual. We are still of the opinion that a short-term consolidation is much more likely than a longer-term correction,” Menke stated. “A consolidation would in fact not be unusual after such a sharp and steep rally and should be considered healthy.”
He emphasized that the fundamental reasons for holding gold remain strong. “The fundamental backdrop for gold remains favourable. It benefits from a strong mix of safe-haven demand and central bank buying, paired with the outlook for lower US interest rates and a weaker US dollar.”
Menke added that central bank buying, particularly from emerging markets seeking to diversify away from the US dollar, has become a “structural factor” supporting gold’s value.
For shoppers in the UAE, this price easing represents a significant turning point. After months of watching prices climb to unprecedented levels, retailers anticipate that pent-up demand will fuel sales in the coming weeks, especially if 24-karat gold remains below the psychologically important Dh500 threshold.