Will Dubai gold rate ever drop back to under Dh300?

Leading US bank Citi forecasts gold is up for a 20% plus price drop in 2026

Last updated:
Manoj Nair, Business Editor
3 MIN READ
Will gold prices go back to being shopper friendly? Citi thinks the asset is up for a correction.
Will gold prices go back to being shopper friendly? Citi thinks the asset is up for a correction.
Arnav Narula/Gulf News

Dubai: Will the Dubai gold rate ever drop back to under Dh300 a gram for 22K?

It was in October 2024 that the local price shot past Dh300 for the first time – and in subsequent months went all the way up to Dh383 a gram for the 22K version. At several points in the last 2 months, it even seemed the price would move closer to Dh400. (The price of a 24K gold gram is already over Dh400.)

Today, the Dubai gold rate is more less unchanged at Dh378.5. (The 24K is at Dh408.75.)

But, going by the latest forecasts put out by Citi, the US bank, gold prices could be in for an over 20% drop, starting from the second-half of this year itself and then picking up speed in the first six months of 2026. Citi predicts gold will then slip to under $3,000 an ounce as investor-led demand for the asset eases.

Will this forecast prove right? If it does, this could well make for a ‘golden age’ for gold and jewellery shoppers worldwide, according to a UAE-based retailer.

'Over-priced'?

“This is the first time in more than a year that some leading entity such as Citi is saying gold is ‘over-priced’ at current levels,” said the retailer. “Everyone’s been saying that gold is heading towards $3,700-$3,800 by end-2025.

“But if Citi’s forecasts are proved right and it means Dubai gold rate comes under Dh300 again, it definitely will open up some heavy buying from shoppers.”

According to Anil Dhanak, Managing Director of Kanz jewels, he remains bullish about where gold prices are heading next. "My forecast is for $3,800 an ounce end of this year."

Talk to the UAE's gold industry sources and the feedback is that as in 2024, jewellery demand in the UAE is muted. Even instances of shoppers going for gold coins and bars as an investment has dropped in recent months just because gold prices have kept shooting higher.

“For many shopper-investors, spending on gold bars and coins when the price per gram is Dh280/Dh290 makes more sense than having to put in Dh370-Dh380 now,” said an investment analyst. “That’s also the reason why many are switching to ‘digital’ possibilities. Or even gold accounts.”

What is Citi saying

Based on Citi's latest projections, gold prices at the end of next 12 months could be back in the $2,800-$3,000 range, and some of the decline could start in the second-half of 2025 itself. The main reason it cites is that the US economy could bounce back and that would filter through the rest of the global markets too.

"We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see President Trump's popularity and US growth 'put' kicking in, especially as the US mid-terms come into focus" - that's what Citi has to say.

Will central banks and institutions stop buying gold, something they have been doing non-stop for 3-4 years now? Only if they do will gold have a chance of cooling off from current highs.

One number will show how much gold has put in over the last 6 months - just over $800 on an ounce basis.

Which also explains why Dubai gold rate is closer to Dh380 than Dh280/Dh290...

Manoj Nair
Manoj NairBusiness Editor
Manoj Nair, the Gulf News Business Editor, is an expert on property and gold in the UAE and wider region, and these days he is also keeping an eye on stocks as well. Manoj cares a lot for luxury brands and what make them tick, as well as keep close watch on whatever changes the retail industry goes through, whether on the grand scale or incremental. He’s been with Gulf News for 30 years, having started as a Business Reporter. When not into financial journalism, Manoj prefers to see as much of 1950s-1980s Bollywood movies. He reckons the combo is as exciting as it gets, though many will vehemently disagree.
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