Gold prices sink another Dh11 after Dh30 plunge in post-Diwali crash

Dubai: Gold buyers in the UAE are finally seeing relief as prices continue to slide sharply, signaling a major correction after months of record-breaking highs.

After Tuesday’s dramatic Dh30 plunge, gold fell another Dh11 per gram on Wednesday, deepening what traders now call a “post-Diwali crash.” (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

In Dubai, 24-karat gold slipped to Dh484 per gram on Wednesday, while 22-karat fell to Dh448 — its lowest in nearly two months, before recovering slightly to Dh487 and Dh451, respectively, by evening. Just days earlier, 24-karat touched an all-time high of Dh525.25 per gram, with 22-karat at Dh486, before global markets turned sharply.

Globally, spot gold further dropped 1% to $4,055 an ounce, extending Tuesday’s 6% rout — the steepest intraday fall since 2013 — as investors dumped safe-haven assets amid improving sentiment on US-China trade ties and a stronger dollar. Silver, too, slumped nearly 9% in tandem.

Why prices keep falling

The second straight day of heavy selling suggests this isn’t just a brief correction. The surge that pushed gold past Dh525 last week has almost completely reversed, as investors move out of safe-haven assets amid improving global sentiment.

Analysts say the fear-driven rally that powered gold’s rise has faded fast. With tensions between the US and China easing and the dollar strengthening, momentum behind gold has “clearly broken,” they note.

Markets had been pricing in deeper rate cuts and prolonged geopolitical uncertainty. But optimism around trade and stronger US economic data are prompting a rotation back into equities and away from bullion. Analysts evaluate the slide as more of a “rebalancing” than a full-blown collapse.

How UAE shoppers react

In the UAE, the steep fall is being met with relief — and renewed interest. Jewellery retailers in Dubai and Sharjah report a noticeable pickup in footfall as residents rush to take advantage of the lowest prices in weeks.

“Once prices dipped below Dh490, customers started coming back,” said one Deira retailer. “Many have been waiting for a break like this since August.”

Price-sensitive shoppers are now timing purchases more strategically, with 24K trading near Dh484 and 22K at Dh448. Many see this as a short-lived buying window before prices stabilise or climb again. Traders caution, however, that volatility may continue through the week as global sentiment shifts.

What could come next

Analysts believe the speed of this sell-off caught markets off guard but emphasize that gold’s long-term fundamentals remain solid.

Inflationary pressures persist, central banks continue accumulating reserves, and expectations of further US rate cuts in 2026 could renew support for bullion.

In the near term, gold could slip slightly further if the dollar strengthens and investor optimism holds. But few expect an extended downturn.

Analysts opine that such corrections often serve to reset the market after overextended rallies, paving the way for steadier demand once panic selling subsides.

For now, UAE buyers are watching closely — and, for the first time in months, gold prices are back within reach.