Dubai: Gold prices dip slightly after sharp rise, demand remains strong

[Editor's Note: Want to know the latest gold rate in Dubai? Click here]

After a weekend of sharp price rise rally, gold fell slightly on Tuesday morning. When markets opened, the 24K gold price fell to Dh516.75 from Dh521.25 per gram on Monday. 

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Meanwhile, the rates of 22K, 21K,18K, and 14K stood at Dh478.50, Dh458.75, Dh393.25, and Dh306.75 per gram, respectively. Spot gold prices stood at $4,274.11 at 9.30am in the morning, falling 0.74 per cent since yesterday.  

Spot prices of silver also fell 1.76 per cent to stand at $62.49. 

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Ole Hansen, Head of Commodity Strategy at Saxo Bank noted that gold was trading at prices close to the record high it hit in October, after a brief dip. “The rebound followed a clear breakaway from the recent consolidation area around USD4,200, underlining how resilient underlying demand has become,” he said.  

Last week, the US Federal Reserve decided to cut interest rates by 25 basis point to a range of 3.5 to 3.75. He added that the latest cut reignited debate about the policy path into 2026, but gold is not rising mainly because of interest rate changes anymore.  

“Support continues to come from a combination of a softer dollar, easing front-end yields and, most importantly, sustained buying by non-western central banks and real-money investors globally through exchange-traded funds,” he said.

“Total holdings in bullion-backed ETFs primarily listed in the US and Europe have increased by almost 15 million ounces this year, more than offsetting the net liquidation seen over the previous three years. This demand increasingly reflects a desire to reduce reliance on the dollar rather than hedge short-term currency moves.” 

Looking ahead, according to Ole, the prices of gold, silver and other precious metals look robust and predicted that in 2026, gold is likely to hit the $5,000 mark and silver to stand at $75- $80.  

“Physical market conditions remain tight, while institutional and central-bank demand for hard assets shows little sign of fading amid political uncertainty, sticky inflation concerns, expanding fiscal deficits and shifting monetary regimes,” he said.

“On a relative basis, gold also looks less stretched versus silver than earlier this year, following the latest silver surge which has pulled the gold-silver ratio back toward its 30-year average around 68 ounces of silver per ounce of gold. However, seasonally, gold often strengthens after the December FOMC meeting and into late February, a pattern this year reinforced by easier financial conditions, balance-sheet expansion through Treasury bill purchases, and expectations that US monetary policy leadership in 2026 could tilt toward a more accommodative stance.”

• 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.