Gold prices fell sharply in Dubai on Wednesday morning, extending recent losses and keeping the precious metal below the Dh500-per-gram mark, offering a more attractive buying opportunity for jewellery shoppers and investors across the UAE.
The 24K gold price was trading at Dh489.75 per gram at the opening of the markets on Wednesday, down from Dh498.75 per gram at the close on Tuesday, a loss of Dh9 per gram.
Other variants of the precious metals, 22K, 21K, 21K and 18K gold prices were trading lower at Dh453.50, Dh434.75, Dh372.75 and Dh290.75 per gram, respectively.
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Spot gold fell below $4,100, trading at $4,089 an ounce and losing 1.01 per cent, while silver traded at $62.12 an ounce.
Analysts said the precious metal came under pressure as investors reassessed the outlook for US monetary policy and shifted towards higher-yielding assets.
Vijay Valecha, Chief Investment Officer at Century Financial, said sentiment towards gold weakened after Deutsche Bank cut its gold price forecasts by as much as 22 per cent, reflecting growing concerns over the trajectory of US interest rates and softer investment demand for the safe-haven asset.
“Gold remains under pressure as investors become increasingly cautious about the outlook for monetary policy. Higher interest rates reduce the appeal of non-yielding assets such as gold and encourage capital flows into fixed-income investments,” Valecha said.
He added that broader weakness in equity markets also contributed to the move. South Korea’s benchmark Kospi index suffered its steepest decline in months on Tuesday, with major technology stocks leading the sell-off. According to Valecha, leveraged exchange-traded funds amplified market volatility through mechanical rebalancing activity, triggering additional selling pressure across financial markets.
“When periods of market stress coincide with elevated interest rates, investors often prefer assets that offer returns through yields. This environment can weigh on precious metals despite their traditional safe-haven status,” he said.
From a technical perspective, Valecha noted that gold has retreated after failing to break through a key resistance level and is currently testing support around the $4,115-$4,117 range.
“A sustained break below this support zone could open the door for a move towards $4,050. However, if prices manage to recover, gold could regain bullish momentum and target levels around $4,175,” he added.
The precious metal has remained volatile in recent sessions as traders balance expectations for US interest rates, global economic growth concerns and fluctuating demand for safe-haven assets.
Source: Khaleej Times