Dubai gold prices dip slightly after historic rally amid global market volatility

Dubai: Dubai gold prices cooled slightly on Friday morning after a dramatic rally that pushed rates to record territory earlier in the week, even as prices remained close to historic highs and market volatility kept buyers and traders on edge.

At 8:43 am, the 24-karat variety was priced at Dh628.25 per gram, marginally lower than Dh629.25 on Thursday, while 22-karat gold stood at Dh581.75 compared with Dh582.75 a day earlier, reflecting a pause after sharp intraday swings that rattled both local and global markets. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The easing followed a turbulent session on Thursday, when Dubai gold prices dropped steeply minutes after hitting fresh records, tracking a sudden pullback in international bullion markets that reversed part of an aggressive rally. Gold prices slid from around Dh665 per gram to Dh629 within minutes, a Dh35 decline that mirrored a rapid fall in global prices before the local market closed at Dh639, highlighting the speed at which sentiment shifted.

Globally, gold tumbled more than 5% after reaching $5,000 an ounce for the first time, prompting traders to reassess a rally that had driven repeated all-time highs. Prices later touched $5,111.07 an ounce before selling pressure accelerated, with the retreat spreading across the wider metals complex. Silver plunged more than 8%, while copper and nickel also moved lower.

Friday’s moves extended the volatility, with bullion falling again after its first decline in nearly two weeks, as the US dollar strengthened and investors digested fresh political signals from Washington.

Dollar strength and Fed speculation weigh

Gold fell as much as 4.8% on Friday after earlier gains of up to 1.4%, continuing the sharp swings that interrupted the previous session’s record-breaking run. A key driver was a stronger dollar, with a widely watched gauge rising as much as 0.5%, making precious metals more expensive for most buyers outside the US.

Markets reacted after reports that President Donald Trump is preparing to nominate Kevin Warsh as the next chair of the US Federal Reserve. Bloomberg News reported that Warsh, widely known as an inflation hawk, has aligned himself with the president in recent months by publicly supporting lower interest rates. Trump said he would announce his nominee on Friday morning US time.

The prospect of a shift at the Fed added another layer of uncertainty to a market already grappling with geopolitical risks and policy volatility, amplifying price swings across assets.

Big picture remains supportive

Despite the pullback, gold has risen by more than 20% so far this year, supported by heightened geopolitical tensions and concerns over US monetary and fiscal stability. Trump’s challenges to the Fed’s independence, combined with a series of aggressive foreign policy statements, have kept demand for safe-haven assets elevated.

Tensions remain high after Trump threatened military action against Iran, while also warning of tariffs on countries supplying oil to Cuba. Additional tariff threats aimed at Europe, Canada and South Korea have unsettled global markets, reinforcing gold’s appeal during periods of policy-driven uncertainty.

Political risk within the US has also featured prominently. An imminent government shutdown was avoided after Trump and Senate Democrats reached a tentative agreement, although negotiations continue over proposed limits on immigration raids that have triggered a national outcry.

- With inputs from Bloomberg.