Dubai: Dubai gold prices dropped sharply on Monday morning, falling below the Dh600 mark after remaining above it for most of last week, amid global profit-taking and calmer trading conditions in the bullion market.
At 9:27 am, 24-karat gold was priced at Dh599.75 per gram, down from Dh607.50 on Sunday, while 22-karat gold fell to Dh555.25 from Dh562.50, continuing a retreat in line with international trends.
The decline follows global bullion slipping below $5,000 per ounce, as traders locked in profits after a strong rally fueled by softer US inflation data in the previous session.
Pullback follows volatile global swings
Gold surged late last week after US consumer price data indicated modest inflation growth, boosting expectations that the Federal Reserve could lower interest rates. Lower borrowing costs generally benefit non-yielding assets like gold, which become more attractive when returns on bonds and cash decline.
Monday’s drop, however, reflects profit-taking after those gains, alongside thinner trading volumes in Asia due to the Lunar New Year holiday in China, one of the world’s largest gold markets.
Strong demand in China
Recent months have seen robust gold buying in China, prompting Shenzhen authorities to issue warnings against illegal retail gold trading, including leveraged online offerings.
February price swings
Dubai gold prices have remained volatile throughout February, with sharp swings between peaks and pullbacks. The month began with 24-karat gold around Dh589 per gram, dipping briefly toward the mid-Dh560 range early in the month. Prices then surged above Dh610 in mid-February before retreating toward Dh600 this week.
Looking back to January, prices experienced even steeper movements, climbing as high as Dh639 before easing toward the Dh590 range by month-end.
These fluctuations mirror global trends, where gold surged to a record above $5,595 in late January before a sharp correction briefly pushed prices below $4,500. Since then, bullion has recovered roughly half of those losses amid choppy trading.
According to Ahmad Assiri, Research Strategist at Pepperstone, current movements point to a period of stabilisation.
“Gold is trading just under $5,000 per ounce, with further consolidation of the range, reflecting a healthy rebalancing phase after the previous high volatility,” he said.
He added that the metal has shifted from sharp swings to narrower price action, indicating that markets are accepting current levels and repositioning more calmly.
“The pullback in realised volatility is a constructive signal for the broader trend, reflecting a shift from speculative, momentum-driven flows toward a more balanced accumulation phase,” Assiri added.
Long-term outlook remains positive
Analysts continue to anticipate higher gold prices over the medium term, citing factors such as ongoing geopolitical tensions, global debt concerns, and central bank demand.
Assiri noted that the upper $4,000 range has shown resilience after early-month corrections, forming what he described as a technical base for future gains.
“Structurally, the $6,000 level remains a medium- to long-term upside target,” he said, adding that calmer trading around $5,000 offers a favourable environment for long-term investors to build exposure.
Banks like ANZ also anticipate that bullion will resume its upward trend, forecasting that prices could reach approximately $5,800 per ounce in the coming months.
