A sharp correction in global gold markets is finally offering UAE buyers some breathing room, with prices for 24-karat and 22-karat gold sliding after a relentless streak of record highs. In Dubai, 24-karat gold has eased to around Dh490.25 per gram and 22-karat to Dh454 — a notable drop from just days ago.
Gold climbed relentlessly through August and early October, driven by fears of inflation, currency debasement and geopolitical uncertainty. With the metal up roughly 55 % year-to-date, traders had piled into safe-haven positions.
“Gold and silver are undergoing a long-overdue correction, triggered by a post-Diwali slowdown in physical demand from key Asian buyers,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank. “Silver’s deeper correction relative to gold once again highlights the liquidity gap between the two markets, silver’s liquidity is roughly nine times lower, amplifying both rallies and sell-offs.
“The structural drivers behind this year’s historic rallies remain intact, leaving metals that are no longer over-bought but still under-owned in portfolios well supported longer term.”
Analysts say the recent sharp decline was sparked by a combination of the inability of gold to break convincingly above the $4,380 / oz level which shifted market sentiment from break-out mode to profit preservation, and technical selling amplified by leveraged positions exiting.
“What followed was a classic rush towards an exit too narrow to cope with the sudden burst of selling from technical focused leveraged traders and recent buyers finding themselves underwater,” Hansen noted.
LND/SAE
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