After a major rally earlier this year, gold prices in Dubai have started to swing, dropping sharply in recent weeks. This has left many buyers in a wait-and-watch mode, hoping for prices to fall further before stepping in.
Gold prices soared nearly 25% between January and April 2025, but have since pulled back by around 4% over the past two weeks. Spot gold fell to around $3,185 per ounce as of Friday, its steepest weekly drop in six months.
In Dubai, 22K gold briefly dipped below Dh350 per gram, before rebounding to Dh357. It had peaked at Dh381.50 earlier this year. Despite attractive promotions like zero making charges, retailers say demand remains soft, with buyers waiting for prices to return closer to March levels — around Dh340.
The recent dip in prices is being driven by calmer global conditions. Talks between Russia and Ukraine in Turkey showed signs of progress, and a temporary rollback in U.S.-China tariffs improved investor confidence, reducing the appeal of gold as a safe-haven asset.
Expectations around U.S. interest rate cuts have also shifted. Markets now expect only two rate cuts this year instead of more aggressive easing. This makes gold — a non-interest-bearing asset — slightly less attractive in the near term.
However, analysts say the long-term outlook for gold remains positive. Central bank buying remains strong, and investor demand is still high in countries like China. Year-to-date, gold is still up more than 20%.
UBS Chief Investment Officer Mark Haefele said gold continues to act as a key hedge against dollar volatility and market uncertainty, even with recent price weakness.
Retailers in Dubai suggest that if prices fall just Dh3 to Dh5 more, they may launch aggressive summer promotions to stimulate buying. Buyers waiting for a deeper dip may have to move quickly if prices begin to rebound.
Unless a new global shock occurs, Dubai gold prices are expected to stay between Dh350 and Dh362 per gram in the coming days.
