Gold and silver prices in Dubai experienced a drastic decline today. This sudden crash affected the local market negatively. On October 21, the 24-carat gold price was reported to be AED 497.25, which is below AED 500, while silver was indicated to be AED 163.90 per gram.
The fall in prices resulted from a tremendous rise in prices that lasted for a week, as investors took their profits and the US dollar appreciated against other major currencies.
The past few weeks have been extremely volatile for precious metal prices. Spot gold touched a record $4,381 per ounce on Monday but fell over 5.3% to $4,092 per ounce by Tuesday evening. Silver also gave back gains, plunging more than 7% below the $50 mark.
The sharp move reflects a combination of profit-taking and easing trade tensions between the US and China, which has reduced some of the safe-haven demand that had driven the metals higher.
Dubai jewelers and investors saw a notable correction across all of the gold categories. The 24K gold rate dropped to AED 497.25 per gram, 22K to AED 458.25, and 18K to AED 379.75. Silver also slid to AED 163.90 per gram.
While these dips may surprise some, they provide a window for buyers to reassess their positions, and ongoing transactions reflect the usual mix of opportunistic buying and cautious selling.
Analysts say the pullback is partly due to a rising US dollar and profit-taking after an extended rally. Daniela Hathorn, senior market analyst at Capital.com, explained, “Gold and silver have been garnering a lot of attention in recent weeks as they staged an impressive rally that led the precious metals to break several record highs.
The momentum was driven by a combination of factors, including safe haven demand on the back of escalating geopolitical tensions and fiscal constraints, expectations of lower rates from the Federal Reserve, and improved fundamentals. However, the upside has run out of steam this week.”
Despite the current silver price dip, the precious metal's fundamentals are still strong. Hathorn mentioned that the combination of supply shortages and increasing demand from the renewable energy sector will most probably make silver highly demanded for the next 12–18 months. This might consequently lead to medium-term price stability.
The decline in the market has served as a reminder of its volatility for Dubai investors. Though short-term corrections are common for precious metals, the demand for gold and silver in the long term continues to be strong.
Buyers and jewelers are keeping an eye on the global factors and local exchange rates. Traders on the Dubai Gold and Commodities Exchange are expected to ride through these swings efficiently.