Dubai gold retreats again, easing from record January levels. Is this a buying window?

Dubai: Dubai gold prices eased again on Thursday, extending a cooling trend that has crept into the local market after January’s sharp rally. By 8 am, 24-karat gold was quoted at Dh586.25 per gram, down from Dh593.50 a day earlier, while 22-karat slipped to Dh542.75 from Dh549.50. The softer pricing has started to draw attention from shoppers who had stayed on the sidelines through last month’s surge.

February opened with heightened volatility after a dramatic end to January. Local prices jumped aggressively through the final week of last month, peaking close to Dh640 per gram for 24-karat gold on January 28 before turning lower. The slide gathered pace after January 29, when prices abruptly reversed, wiping out a large part of the late-month gains within days. Early February briefly brought relief with prices hovering near Dh594, yet the momentum faded again this week, leaving rates noticeably below the end-January highs.

Despite the pullback, prices remain well above early-January levels, when 24-karat gold was trading near Dh536 per gram. The month has therefore delivered sharp swings rather than a clean trend, keeping buyers cautious and dealers focused on near-term movements rather than long-term positioning.

Internationally, bullion slipped below the $5,000 an ounce mark amid a lack of fresh catalysts following last week’s historic plunge. Gold has traded in a narrow, indecisive range this week as traders booked profits and waited for clearer signals. Prices remain more than $1,000 below the all-time high reached on January 29, yet still hold gains of over 10% since the start of the year.

On Wednesday, bullion dropped as much as 1.9% to $4,853.67 an ounce as the dollar strengthened, before stabilising. Earlier in the session, prices had briefly climbed above $5,000 after dip buyers stepped in, though that support proved short-lived. Silver also pared earlier gains, reflecting the cautious mood across precious metals.

Geopolitical tensions continue to provide an underlying layer of support. Strains between the US and Iran intensified after the American Navy downed an Iranian drone, while President Donald Trump reiterated that diplomatic talks remain ongoing. Reports of difficulties surrounding upcoming nuclear discussions added to market uncertainty, though traders largely treated the developments as background noise rather than immediate price drivers.

Last month’s rally in precious metals was fuelled by speculative momentum, geopolitical unease and concerns over the Federal Reserve’s independence. Market watchers had flagged that the move was stretched, warning that gains had come too quickly. Those concerns materialised at the end of last week, when gold suffered its steepest fall since 2013 and silver recorded its largest single-day drop on record.

- With inputs from Bloomberg.