Dubai gold surges after 15-day drop, prices jump overnight

Dubai: Gold prices in Dubai rose on Wednesday morning, marking the first gain in over two weeks and breaking a steady downward trend that had weighed on retail sentiment.  (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

At 8:30 am, the 24-karat price climbed to Dh550, up from Dh528.50 a day earlier. The 22-karat variant followed, rising to Dh509.50 from Dh489.25, reflecting a sharp overnight adjustment that is likely to catch the attention of buyers who had been waiting for further declines.

The move comes after nearly 15 days of consistent easing in local rates, offering the first indication that the recent correction may be stabilising.

A month of steady declines

Through most of March, gold prices in Dubai had been on a gradual but persistent slide. Early in the month, rates were holding well above Dh620 levels for 24-karat, even touching Dh628 on March 10, before beginning a sustained pullback.

By mid-March, prices were still elevated near Dh600, but momentum had already started to weaken. The second half of the month saw sharper declines, with gold slipping below Dh580 and then dropping further to Dh528 by March 24.

The latest rebound to Dh550 represents a notable shift, although prices remain significantly below early March highs. The overall trajectory still reflects a broader cooling phase following a strong rally at the start of the year.

Global cues drive reversal

International markets played a key role in the turnaround. Gold extended gains globally after snapping a nine-day losing streak, supported by renewed optimism around diplomatic efforts in the Middle East.

Bullion surged as much as 2.8% to cross $4,600 an ounce, building on earlier gains. Signals from Washington suggesting a possible diplomatic route with Iran, along with calls from China for renewed talks, helped ease immediate geopolitical concerns.

At the same time, oil prices retreated and equities moved higher, while the US dollar weakened. This combination provided support to gold after weeks of pressure from rising yields and a stronger dollar.

Volatility still in play

Recent price behaviour highlights how sensitive gold remains to broader macro signals. Elevated oil prices had earlier raised inflation concerns, prompting expectations that central banks may keep rates higher for longer. That dynamic reduced the appeal of non-yielding assets such as gold.

There were also signs of liquidity-driven selling in recent weeks, with investors exiting bullion positions to cover losses in equities and bonds. That added to the downward pressure seen through most of March.

Fresh reports around central bank activity, including discussions on using gold reserves for currency defence, have also added another layer of complexity to market sentiment.

The direction from here will depend heavily on geopolitical developments, currency movements and central bank signals. For now, the break in the downward trend suggests that the market may be entering a more volatile phase rather than continuing a one-way slide.

- With inputs from Bloomberg.