Dubai: Gold prices slide further down; 24K drops to Dh479

Gold prices in the UAE plunged, continuing on its downward trend on Tuesday evening. The prices of the yellow metal have fallen over Dh50 since it hit a record high of Dh521.75 on Monday, October 20. Some experts have called it the most significant movement in over a decade. 

“The sell-off right after achieving these highs was one of the most significant ones in about 12 years,” said Vijay Valecha, Chief Investment Officer, Century Financial. “It is important to note that prices had been rising for nine consecutive weeks since August, taking prices about $1,000 higher. Such a drastic rally lasting for this long was not sustained, as history shows, with an inevitable degree of profit booking settling in.” 

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On Tuesday, the spot price of gold for 24K fell to Dh470 — registering a more than Dh20 drop in the last 48 hours. As the market closed, the prices rebounded slightly, with 24K standing at Dh474.75 on Tuesday evening. Similarly, 22K, 21K and 18K also slipped to Dh439.50, Dh421.50, and Dh361.25 per gram, respectively.

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The prices have fallen about nine percent since its peak on October 20. Globally, spot prices slid to $3948.42 per ounce at 7pm UAE time, while silver climbed slightly, about 0.17 percent to $46.96.

Fading shine

 Several analysts have pointed out the progressing trade talks between the world’s largest economies — US and China — are the reason for the steady decline of gold.

“This has raised optimism in the risk markets, fading away gold’s safe haven shine,” said Valecha. “A preliminary consensus on topics such as export controls, fentanyl, and shipping levies was reached by both sides recently, with US Treasury Secretary even stating that the threat of 100 percent tariffs had passed, significantly cooling geopolitical tensions.”

He said that there is increasing optimism ahead of the important Trump-Xi summit later this week, as investors expect a small step toward a trade agreement that would ease some tensions and boost the economy. He added that in terms of gold, traders will now adopt a wait and watch policy.

“Despite a softer-than-expected CPI print that came in at 3 percent last week, raising street consensus for aggressive rate cuts, the shift in momentum for Gold prices earlier in the week was strong enough to close the week 3.29 per cent lower,” he said. “On a technical basis, the RSI on the daily chart remained in overbought territory for weeks before the sell-off, suggesting a potential reversal, with prices now finding support near the 21-day EMA and a breakout retest level near $4,060.”

• Dubai

Nasreen Abdulla

nasreen@khaleejtimes.com

Nasreen Abdulla is a Special Correspondent covering food, tech and human interest stories. When not challenged by deadlines, you’ll find her pulling off submissions on the jiu jitsu mats.