Dubai gold prices hold below Dh500 as global markets steady
<h2><strong>Gold rates in Dubai stay below Dh500 as markets stabilize post-Diwali</strong></h2><p>Dubai: After this week’s post-Diwali plunge, gold prices in Dubai have stayed under the <strong>Dh500-per-gram</strong> mark for a second consecutive day, offering some relief to shoppers after months of record highs.</p><p>By Friday evening, <strong>24-karat gold</strong> in Dubai was priced at <strong>Dh498.25 per gram</strong>, while <strong>22-karat</strong> stood at <strong>Dh461.50</strong>. Prices had earlier dipped as low as <strong>Dh490</strong> and <strong>Dh454</strong>, respectively, before stabilizing by market close — roughly in line with Thursday’s levels.</p><p>Local retailers say consumer sentiment remains strong, with buyers quick to take advantage of the lower price range. “After weeks of steep prices, this correction has revived demand,” said a Dubai gold retailer. “People were waiting for gold to fall below Dh500, and that’s exactly what’s happened.”</p><h3><strong>Global prices find footing</strong></h3><p>Globally, gold prices were largely unchanged by Friday evening after tumbling nearly <strong>6% over two sessions</strong> — their sharpest drop in months. The retreat followed renewed optimism about a potential <strong>US-China trade breakthrough</strong>, easing geopolitical fears and dampening the appetite for safe-haven assets like gold.</p><p>Analysts noted that the recent rally in gold, which had pushed the metal to record highs earlier this month, may have been overextended. “The pullback was due,” said one commodities strategist. “Investors are now reassessing whether gold’s surge had run ahead of fundamentals.”</p><p>Still, even after this correction, gold prices remain about <strong>55% higher for the year</strong>, supported by expectations that the <strong>US Federal Reserve</strong> may deliver at least one more <strong>quarter-point interest rate cut</strong> before the end of 2025.</p><h3><strong>Investors eye ‘healthy consolidation’</strong></h3><p>According to <i>Bloomberg</i> data, traders have been actively hedging against further volatility, with <strong>one-month implied price swings</strong> hovering near their highest levels since 2022. The week’s sell-off also coincided with the largest <strong>single-day outflow</strong> from gold-backed exchange-traded funds (ETFs) in five months, suggesting short-term repositioning by large institutional investors.</p><p>However, market analysts insist this is a temporary cooling phase rather than the start of a longer downturn. <strong>Carsten Menke</strong>, Head of Next Generation Research at <strong>Julius Baer</strong>, said that such corrections are a natural part of a healthy market cycle.</p><p>“Gold remained resilient overall, even though the sell-off was steep,” Menke explained. “We see this as a short-term consolidation, not a structural correction. After such a sharp rally, a period of stability is healthy.”</p><p>Menke added that the <strong>fundamental outlook for gold remains strong</strong>, driven by a mix of <strong>central bank buying</strong>, <strong>safe-haven demand</strong>, and <strong>expectations of lower US interest rates</strong>. “If concerns about the US dollar’s long-term stability persist, gold could transition from a cyclical to a structural safe-haven asset,” he said.</p><h3><strong>Central banks still buying</strong></h3><p>Central banks across emerging markets continue to be major gold buyers, diversifying their reserves away from the US dollar to reduce exposure to sanctions and currency risk. This consistent institutional demand has provided an underlying floor for prices, even amid speculative volatility.</p><p>“The move away from the dollar isn’t just tactical — it’s strategic,” Menke said. “That means gold will remain a key reserve asset for years to come.”</p><h3><strong>Dubai shoppers seize the moment</strong></h3><p>For UAE residents, the price dip comes as welcome news after months of record-breaking highs that dampened festive spending. Retailers expect <strong>pent-up demand</strong> to lift jewellery sales through the coming weeks, especially if prices hold below the <strong>Dh500 mark</strong> for 24-karat gold.</p><p>“Shoppers are returning,” said another retailer in Dubai Gold Souk. “Many are locking in purchases now, fearing prices could rebound once the global market steadies.”</p><p>With global inflation concerns easing and local demand rebounding, analysts expect Dubai’s gold prices to <strong>hover between Dh495 and Dh505</strong> in the near term — a level seen as both attractive for buyers and sustainable for traders.</p>