Dubai gold slips from record highs after strong December run. Is it time to buy?

Dubai: Gold prices in Dubai edged lower on Monday morning, easing back from a record-setting rally that’s been driven by a global surge in precious metals. The 24-karat variety stood at Dh542.75 per gram at 8:45 am, while 22-karat gold was Dh502.50. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

After pushing to new peaks late last week, gold prices slipped in early trading as investors locked in profits and global sentiment turned more cautious. The pullback mirrors international moves, where gold retreated slightly after hitting record levels amid increased volatility in silver and copper markets.

A month of sharp swings

Gold prices in Dubai have risen noticeably through December, gaining from Dh511.75 for 24-karat on December 1 to above Dh545 by December 26, marking a climb of more than 6% before easing toward the month-end. A similar pattern was seen in 22-karat gold, which rose from Dh473.75 to above Dh505 before slipping back.

Three consecutive US Federal Reserve rate cuts this year, strong central bank purchases, and a weaker dollar have fueled the broader precious-metals rally. Lower borrowing costs make non-interest-bearing assets like gold more attractive, especially during periods of geopolitical uncertainty

Silver surge takes a breather

Silver’s extraordinary rally appeared to cool after briefly breaking through $80 per ounce for the first time in decades. The white metal, which touched $84 per ounce in early Monday trading, slipped as much as 5% before stabilising. Analysts attributed the volatility to speculative trading and fears of supply shortages as inventories hit multi-year lows.

“This is not good. Silver is needed in many industrial processes,” Elon Musk said on X, responding to ongoing concerns about shrinking global silver stockpiles.

China’s export measures, announced earlier in the year, have further complicated supply chains. While China is the world’s largest silver consumer, it produces much of its silver as a byproduct of other metals. Any export restrictions are likely to tighten a market already seen as fragile.

The backdrop remains supportive for precious metals. Hopes for additional Fed easing in 2026, combined with geopolitical frictions in oil-producing regions and increased central bank diversification away from the dollar, continue to lend strength to gold and silver markets.

While volatility has picked up, traders view the recent pullback as a short-term correction within a broader upward trend. Dubai’s retail and investment demand is expected to remain firm as shoppers and investors adjust to the new price range before the new year.

- With inputs from Bloomberg.