Dubai gold prices ease after record run. More declines ahead?

Dubai: Dubai’s gold market opened lower on Thursday, tracking a brief recovery in global bullion after a sharp selloff.

Retail prices for 24-karat gold slipped to Dh472.50 per gram at 7:30 am, down from Dh476.25 on Wednesday evening. That is a drop of about 0.8%. The popular 22-karat category fell to Dh437.50 from Dh441.00, also about 0.8% lower.

Globally, gold staged a modest bounce after heavy losses, rising as much as 0.9% to trade near $3,967 an ounce. The move comes after bullion fell almost 5% over the previous four sessions as traders reassessed the pace and scale of interest-rate cuts in the US

(Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Federal Reserve Chair Jerome Powell downplayed the likelihood of a December policy reduction after the widely expected quarter-point cut on Wednesday. The meeting marked the third consecutive gathering with dissenting votes, a sequence not seen since 2019 and a reminder of the policy divide within the central bank.

The split view has complicated the picture for investors already dealing with a lack of fresh economic figures after a US government shutdown earlier in October. Higher interest rates generally weigh on gold because the metal does not generate yield.

The latest retreat follows a record run in which gold surged beyond $4,380 an ounce last week. Momentum indicators had signalled stretched conditions, and improving sentiment around US-China trade relations is removing some of the urgency behind haven buying.

Presidents Donald Trump and Xi Jinping are set to finalise a detente when they meet in South Korea on Thursday. Initial indications point to a deal that could roll back recent tariffs, fees and export restrictions and put the trade confrontation on hold.

Despite the pullback, gold remains up about 50% this year. Central-bank demand and investor positioning for what has been described as a debasement trade have provided strong support, with buyers favouring bullion over sovereign debt and major currencies in a year of large fiscal deficits.

Exchange-traded funds linked to gold have been a key channel for institutional and retail interest, although this week’s outflows show some profit-taking and rebalancing as the market cools from record highs.