Gold stalls after steep drop: Is this your best shot to buy cheap before it rebounds?

Dubai: After gold saw a steep selloff as a major de-escalation in US-China trade tensions hurt demand for havens, prices are holding losses for now. What does this mean for gold buyers looking to buy jewellery cheap and desperately eyeing a drop in prices?

In the UAE, a gram of 24K gold cost a tad over Dh392, while 22K was priced at Dh362.75. Globally, bullion prices hovered around $3,240 an ounce, pausing after Monday’s 2.7% slump — a move that sparked excitement among bargain-hunting gold buyers. But hopes for a further free fall could be premature. (Check live rates here.)

The sharp slide came after Washington and Beijing struck a temporary trade truce. The US agreed to cut tariffs on Chinese goods from 145% to 30% for 90 days, while China rolled back levies on most US imports to 10%. This reduced investor appetite for safe-haven assets like gold, pushing money back into equities and other riskier bets.

More headwinds

Adding to gold’s headwinds: the US dollar surged, marking its biggest gain since the post-election rally last November, and Treasury yields climbed, both of which tend to dent gold's appeal. Compounding this shift, traders now expect only two rate cuts from the US Federal Reserve in 2025, fewer than previously priced in. With interest-bearing assets looking more attractive again, gold — which pays no yield — becomes a tougher sell.

Still, gold prices are up nearly 25% year-to-date, a reminder that despite temporary dips, broader macro uncertainty and geopolitical risk continue to keep demand elevated. While this week’s developments signal cooling tensions, many analysts aren’t convinced it’s a lasting peace.

“The devil is in the details during negotiations,” says Christopher Wong, strategist at Oversea-Chinese Banking Corp. “Some degree of caution remains warranted, as we see consolidation in the range of $3,150 to $3,350 an ounce.”

For retail buyers hoping to catch a bottom, this could be a narrow window. Spot gold held steady at $3,239.66 in early Tuesday trade, and unless another geopolitical jolt pulls it lower, prices may stay pinned in a tight range.

Bottom line for gold buyers:

If you’ve been waiting for a big crash in gold prices, this week’s dip might be as good as it gets — at least for now. Unless fresh shocks rattle markets again, the yellow metal may not oblige with deeper discounts. The question is: Do you wait — or grab the dip while it's still around?