Gold rates in Dubai to stay below Dh500 for now

Dubai: After the post-Diwali crash, gold prices have stayed below the Dh500 mark for a second day in the UAE.

In Dubai, the price of 24-karat gold was at Dh498.25 per gram by Friday evening, while 22-karat was priced at Dh461.50. The day closed at more or less the same price levels they were at yesterday, despite prices dropping to Dh490 and Dh454, respectively, earlier in the day.

Retailers said demand remains steady as buyers adjust to the new price levels following the brief correction.

(Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Globally, gold prices stayed largely unchanged after falling nearly 6% over the previous two sessions. The pullback comes as investors assess whether the rally that lifted gold to historic levels had gone too far. The shift in sentiment follows renewed optimism that a potential US-China trade deal could ease geopolitical tensions and reduce demand for traditional safe-haven assets.

The so-called debasement trade, where investors turn away from sovereign debt and major currencies to hedge against widening fiscal deficits, has been a key driver of gold’s rally since mid-August. Even after this week’s correction, the metal remains about 55% higher this year, supported by expectations that the US Federal Reserve could deliver at least one quarter-point rate cut before year-end.

According to market data, traders have been actively hedging against further volatility, with one-month implied price swings holding close to their highest levels since 2022. The recent sell-off also coincided with a sharp outflow from gold-backed exchange-traded funds, which recorded their biggest single-day decline in holdings in five months, Bloomberg data shows.

Carsten Menke, Head of Next Generation Research at Julius Baer, said the latest decline should be seen 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,” he said. “A consolidation would in fact not be unusual after such a sharp and steep rally and should be considered healthy.”

Menke added that the underlying picture for gold remains intact. “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,” he noted. “Against the backdrop of a slowing US economy, we see safe-haven demand as a cyclical factor which could become structural should the current concerns about the status of the US dollar and the independence of the US Federal Reserve be confirmed.”

He pointed out that central bank demand is already a “structural factor,” as emerging market nations diversify away from the US dollar to reduce vulnerability to sanctions.

For UAE shoppers, the price easing marks a turning point after months of record-breaking highs. Retailers expect pent-up demand to lift sales in the coming weeks, particularly if prices remain below the Dh500 threshold for 24-karat.