Dubai Gold Market Fluctuations Continue

Gold Market in Dubai: After a Slight Dip, Could a Rise Follow?

The opening of the Dubai gold market on Wednesday showed a slight decrease, with the price of 24-karat gold falling to 402.5 dirhams per gram, while 22-karat dipped to 372.5 dirhams. This moderate decline occurred despite a 0.25 percent increase in international spot gold prices, reaching $3,338.87 per ounce. After the record-high prices experienced in the first half of the year, many Dubai buyers and investors now ponder whether it's time to buy or sell.

Strong Start to the Year, Sustained Demand

In the first half of 2025, the price of gold showed an impressive 26 percent increase. Several factors fueled this rise: a weakening U.S. dollar, escalating geopolitical risks, strong investor demand, and continuous central bank purchases all contributed to the momentum. Tensions from trade wars between the United States and its partners also enhanced the appeal of safe assets like gold.

What to Expect in the Second Half of 2025?

According to the World Gold Council (WGC), a moderate increase can be expected in the second half of the year if macroeconomic factors – such as trade disputes, inflation, and monetary policy – remain on their current path. Analysts from the organization believe that gold could maintain a favorable position for both tactical and strategic investments.

Risks and Opportunities

While the outlook is promising, it is not without risks. If the global economic environment stabilizes and trade normalizes, gold prices might fall. Additionally, if central bank demand weakens or investors prefer U.S. treasuries, it could further reduce demand for gold. The WGC suggests that a negative market sentiment could lead to a price drop of 12-17 percent, and by the end of the year, returns might only be in the low double digits or single digits.

At What Level Does Buyer Interest Arise?

Analysts see that, from a technical standpoint, gold has a natural support level around $3,000. If prices decline to this level, it could attract new investors looking to capitalize on the favorable price. However, if this support level is breached, an accelerating selling wave is not out of the question.

What Does This Mean for Dubai?

Dubai remains a global hub for gold trading, where local prices quickly reflect international trends. The current price movements urge buyers and investors to carefully weigh their decisions. For those who believe in the long-term value stability of gold, the current prices may offer a new entry opportunity. Meanwhile, those looking to speculate in the short term might consider waiting to see where the global financial and geopolitical situation heads next.

(Source of the article: Based on analysts from the World Gold Council (WGC).)