Dubai gold loses Dh37 a gram in a month, giving festive shoppers a break

Gold shoppers in Dubai are getting some relief just as families prepare for Navratri, Dhanteras and Diwali. The price of 24K gold has fallen Dh37 per gram over the past month, moving below Dh500 and prompting some expatriate and non-resident Indian families to bring forward their festive purchases, according to Khaleej Times. For buyers preparing for the celebrations, the retreat offers a lower entry price. For investors, it reflects a market still struggling to find support.

Dubai’s 24K price opened Tuesday at Dh496.75 per gram, against Dh498.50 at Monday’s close. Other purity grades also fell: 22K stood at Dh460.00 per gram, 21K at Dh441.00 and 18K at Dh378.00. On the international market, spot gold — the price for immediate delivery — was down 0.18% at $4,122 an ounce. Khaleej Times linked the weakness to a stronger US dollar and higher Treasury yields, the returns available on US government debt.

A shopping window before the festivals

The timing matters for households planning festive gold purchases. Khaleej Times previously reported that the fall below Dh500 per gram had encouraged some Indian families living abroad to buy earlier than planned. The latest decline extends that price relief across Dubai and the wider UAE ahead of the celebrations. It also exposes the contrast at the heart of the market: prices that look more manageable to jewellery shoppers can still look vulnerable to investors watching the next move.

Chris Weston, head of research at Pepperstone, said gold’s short-term investment outlook remained difficult. In his assessment, price movements are driving sentiment and money flows, and the current trend is still downward. Attempts to recover are quickly meeting fresh selling, leaving sellers in control rather than signalling a durable turnaround. He identified the recent lows near $4,110 an ounce as an important level to monitor.

Weston’s assessment: sellers remain in control, and a move above $4,275 would be needed to make the near-term outlook more positive.

Why holding gold has become harder

Weston pointed to the rising opportunity cost of owning gold — the income investors give up by holding an asset that pays no yield. Several broader economic forces are working against it, he said. The US dollar index, a measure of the currency’s strength, was holding above 102 and around multi-year highs. Meanwhile, US 10-year real yields, which account for inflation, had climbed to about 2.93% after rising sharply through August and September.

Those real yields were around their highs for the economic cycle, creating a significant obstacle for gold, according to Weston. He also described inflows into GLD and gold-miner exchange-traded funds — investment funds traded on stock exchanges — as limited. Together, those conditions help explain why cheaper prices for physical buyers have not yet translated into a stronger short-term investment picture.

The next test is whether gold holds near its recent lows. Weston said a break below roughly $4,110 could speed up selling toward $4,100 and potentially $4,000, an area where he said demand had been strong through June, July and August. On the other side, he would look for a move above $4,275 before taking a more positive near-term view.