Dubai: Gold prices recover after big sell-off over the past couple of days

Gold prices rose nearly Dh6 per gram in early trade on Thursday morning as the precious metal rose above $4,100 per ounce, recovering some of the losses of the previous few days.

The Dubai Jewellery Group data showed 24K trading at Dh496.5 per gram on Thursday morning, up from Dh490.5 per gram at the close of the markets on Wednesday.

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Similarly, the other variants of the yellow metal also rose at the opening of the markets with 22K, 21K, and 18K trading at Dh459.75, Dh440.75, and Dh377.75 per gram, respectively. Spot gold was trading at $4,131.28 per ounce, up two per cent.

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Ipek Ozkardeskaya, senior analyst at Swissquote, said what probably better explained Wednesday’s precious metals selloff was mainly the fact that the metals are now trading in deeply overbought market conditions with heightened volatility.

“The gold volatility index has spiked this October to its highest level since March 2022. If history is any guide, gold retreated 20 per cent following that volatility spike. And given the latest euphoria, crowded speculative long positions and overbought conditions, a further price pullback is possible — without, however, threatening gold’s role in long-term portfolios,” she said.

Ozkardeskaya added that gold has become the go-to asset for global investors — from retail to institutions and central banks — seeking protection from sovereign debt worries, trade and geopolitical jitters, and inflation: factors that have become today’s reality.

Waheed Abbas

waheedabbas@khaleejtimes.com

Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.