Dubai gold price drop Dh2.75 as dollar gains strength
UAE shoppers delay jewellery shopping, anticipating further price drops
DUBAI: Gold prices in Dubai fell on Tuesday, driven by a stronger dollar and renewed optimism over a ceasefire between Russia and Ukraine.
Spot gold was down 0.4% at $3,215.31 an ounce as of 02:10 GMT, reflecting broader global movements that are prompting investors to move away from safe-haven assets.
In the UAE, the 24-carat rate declined by Dh2.75 to Dh387.75 per gram. Similarly, 22K dropped to Dh359.25 (down Dh2.25), 21K slid to Dh344.50 (down Dh2.25), and 18K fell by Dh1.75 to Dh295.25. The US dollar slightly rebounded after a recent dip, making gold more expensive for holders of other currencies and dampening overall demand.
Global influences
US gold futures slipped 0.5% to $3,218.40, trading just above $3,215. The metal has climbed over 23% this year, fuelled by geopolitical and economic uncertainty. However, Reuters reported that the initial investor response to the US credit downgrade appears to be wearing off. Talks between US President Donald Trump and Russian President Vladimir Putin have sparked hopes of a truce, weakening safe-haven appeal.
Moody’s recent downgrade of the US credit rating to “Aa1” from “Aaa” has unsettled markets. Federal Reserve officials remain cautious, and markets now price in about 53 basis points of rate cuts in 2025, with the first expected in October.
Local market mood
In Dubai, gold rates have hovered between Dh355 and Dh360 for 22K over the past week. But despite this range-bound trend, residents seem hesitant to buy. Retailers say many shoppers are anticipating a drop towards Dh350 per gram and are holding off purchases, even with summer travel looming.
While some are still investing in coins and bars, jewellery sales have slowed. Instalment-based purchases continue, but there's limited interest in exchange offers. Traders believe shoppers' sentiment aligns with broader market speculation – waiting for further clarity before making any moves.