After a steep overnight fall, Dubai gold stages quick comeback
Prices recover in early trade while investors track US inflation data for Fed cues
Dubai: Gold prices in Dubai recovered early Friday, clawing back ground after a steep global selloff that shook precious-metals markets in the previous session. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)
At 8.30 am, the 24-karat rate stood at Dh600 per gram, up from Dh596.75 on Thursday, while 22-karat rose to Dh555.75 from Dh552.50. The rebound came after heavy volatility driven by global market jitters and investor repositioning.
The recovery mirrored moves in international bullion markets, where gold climbed up to 1.4% after suffering a 3.2% drop in the previous session, the biggest one-day fall in a week. The decline followed broad risk-off sentiment across financial markets, with Wall Street equities sliding on concerns tied to the earnings outlook of companies exposed to artificial intelligence disruptions.
Margin calls and algorithmic selling
Analysts pointed to technical factors and cross-asset selling pressure behind the sharp pullback. The selloff in US stocks spilled into commodities as investors moved to cover losses.
Market strategists also highlighted automated trading flows that tend to amplify price swings during volatile periods. Michael Ball, a macro strategist at Bloomberg, said selling from commodity trading advisers using computer-driven models likely intensified the downturn.
Profit-taking added to the pressure, particularly after gold and silver had rallied sharply in recent weeks. Silver alone dropped nearly 11% in the previous session, reflecting how stretched speculative positioning had become.
Focus shifts to US inflation data
Investor attention has now shifted to US inflation figures due later Friday, which are expected to influence expectations around the Federal Reserve’s next policy move.
Strong US labour data earlier this week reduced expectations for near-term interest-rate cuts, a key factor for gold because lower borrowing costs typically support demand for non-yielding assets.
Long-term outlook remains positive
Despite the recent turbulence, gold remains close to record territory after hitting an all-time high above $5,595 an ounce on January 29, marking the peak of a rally driven by strong speculative inflows and macro uncertainty.
Many global banks continue to project higher prices over the coming year, citing persistent geopolitical risks, concerns around central bank credibility, and a broader shift by investors away from traditional safe assets such as currencies and government bonds.
BNP Paribas expects bullion to reach $6,000 an ounce by year-end, while Deutsche Bank and Goldman Sachs maintain similarly bullish outlooks, signalling that the underlying drivers supporting gold demand remain intact even amid short-term volatility.
- With inputs from Bloomberg.
