Gold Prices Plunge in Dubai Market

The Gold Price Plummeted Close to 9 Dirhams Per Gram

On Thursday morning, a significant price drop was witnessed in the Dubai gold market: the price of 24-carat gold fell close to 9 dirhams per gram as the international gold price sank below 3,225 dollars per ounce. According to fresh data from the Dubai Jewellery Group, the 24K gold opened at 389 dirhams per gram in the morning, whereas on Wednesday, this price was around 398 dirhams.

Significant Drop Across All Carat Categories

The prices of other common gold grades also fell:

22K: 360.25 dirhams/gram

21K: 345.25 dirhams/gram

18K: 296.0 dirhams/gram

The decline in exchange rates was partly caused by weak U.S. economic data, which increased market expectations for interest rate cuts and eased international trade tensions.

Global Gold Demand: Stable But Price Sensitive

According to the World Gold Council, the quarterly global gold demand amounted to 1,206 tons, marking a 1% increase compared to the same period last year, despite gold prices hitting historic peaks. The price per ounce of gold consistently remained above 3,000 dollars, significantly influencing the volume of physical purchases.

Central Banks: Still Active Buyers

For the 16th consecutive year, central banks are net buyers of gold, increasing their reserves by 244 tons in the first quarter of this year amid geopolitical uncertainties. Although this quantity is 21% lower compared to the previous year, it still aligns with the average of the past three years, during which the market was characterized by strong and persistent institutional demand.

Jewelry Market: Valuable but Declining Volume

The historic price records did not go unnoticed in terms of jewelry demand: the volume of physical jewelry purchases sank to a low not seen since 2020. This is understandable, as buyers are sensitive to price fluctuations, especially when the precious metal reaches its peak. Nonetheless, the jewelry market remained relatively stable in value, indicating that demand in the premium segment remains lively.

What to Expect in the Coming Months?

Global economic prospects remain uncertain. This uncertainty – as analysts from the World Gold Council noted – could further support gold as a classic safe-haven asset. Whether it's institutional, retail, or official players, increasing uncertainty could promote a rise in gold demand in the coming months.

Summary

The Dubai gold market showed strong movement, and the near 9 dirhams drop in the 24K price per gram is an eye-catching event for those investing in or considering purchasing gold. While demand volume has eased, the precious metal continues to play a stable store of value role, particularly in light of global economic uncertainties.

(Source of the article: World Gold Council release.)