Global sell-off weighs on bullion as volatility rattles precious metals markets.
Dubai: Gold buyers in Dubai are witnessing a sudden price drop, with 22‑karat gold falling below Dh490 on Monday morning following a sharp multi-day decline.
At 9:20 am, 24‑karat gold was trading at Dh526.25, down from Dh541.50 the previous day, while 22‑karat gold fell to Dh487.25 from Dh501.50. The decline represents one of the steepest short-term corrections this year, bringing prices closer to levels seen before the recent rally.
The price drop is attracting attention from residents planning jewellery purchases, as lower rates improve affordability after weeks of elevated prices.
Global sell-off drives local prices lower
The decline in Dubai mirrors a broader global sell-off in bullion, with gold dropping sharply amid heightened volatility in financial markets. International prices fell by as much as 3.8%, bringing bullion close to erasing its gains for the year.
The pressure on gold prices comes from multiple factors linked to the ongoing Middle East conflict. Swings in oil prices have heightened inflation risks, reducing expectations of near-term interest rate cuts by major central banks. Higher rates typically weigh on gold, which offers no yield.
Simultaneously, investors have been liquidating positions to cover losses in other asset classes, accelerating the decline. Gold has now fallen for eight consecutive sessions, recording its steepest weekly drop in decades.
Sharp corrections within broader trend
Rania Gule, Senior Market Analyst at XS.com MENA, said the current phase reflects a complex market environment, with short-term pressures testing the underlying bullish momentum.
“Precious metals markets, led by gold and silver, are currently at a pivotal stage, marked by high uncertainty and conflicting investor expectations between strong bullish momentum and sharp corrections,” said Rania Gule, Senior Market Analyst at XS.com MENA.
She explained that while gold remains supported by long-term factors such as global uncertainty and institutional demand, sharp pullbacks are part of the normal cycle.
“In my view, gold maintains strong structural bullish momentum driven by fundamental factors, including ongoing global economic uncertainty and rising institutional demand for hedging. However, this momentum is not linear and is often interrupted by sharp corrections that help rebuild long positions,” Gule added.
She noted that a deeper correction cannot be ruled out if macroeconomic pressures persist, though this would not necessarily indicate a reversal of the long-term trend.
“From my perspective, such a scenario does not necessarily indicate a shift to a bearish trend; instead, it may offer investors an opportunity to reposition and build long-term holdings at more attractive levels,” Gule said.
What it means for UAE buyers
The recent price drop has brought gold back into focus for UAE consumers, especially those waiting for a dip before making purchases. Prices have fallen sharply from mid-March highs, when 24‑karat gold traded above Dh600.
The short-term outlook remains uncertain, with markets reacting to geopolitical developments and changes in interest rate expectations. In the near term, price movements are likely to stay volatile, but current levels are already prompting renewed buying interest among retail buyers.
