Dubai’s gold market experienced a slight correction on Tuesday morning following a historic surge that propelled prices to unprecedented levels just one day earlier. The 24K gold variety, representing the purest form of the precious metal, declined to Dh554.0 per gram at 9am UAE time after reaching an all-time peak of Dh555.75 per gram on Monday.
The broader gold market displayed similar patterns across various karat weights. The 22K variant settled at Dh513.0 per gram, while 21K, 18K, and 14K gold traded at Dh491.75, Dh421.5, and Dh328.75 per gram respectively. This modest pullback occurred despite international spot gold maintaining strength at $4,594.34 per ounce, hovering near the psychologically significant $4,600 threshold.
Market analysts attribute the sustained gold rally to profound structural shifts rather than temporary speculative activity. Rania Gule, Senior Market Analyst for MENA at XS.com, emphasized that the current market dynamics reflect deep-seated investor anxiety driven by multiple geopolitical and economic factors. “Gold’s ability to remain close to its peaks despite the absence of strong expansionary monetary stimulus confirms that current demand is driven by the search for safety rather than the pursuit of short-term gains,” Gule noted.
The analyst identified several critical factors sustaining gold’s elevated position, including US intervention in Venezuela, potential military action against Iran, intensifying Russia-Ukraine hostilities, and escalating China-Japan tensions. These interconnected developments have created what Gule describes as “structural demand for gold as a safe haven” that transcends temporary market reactions.
This trend is further reinforced by a gradual erosion of global risk appetite, with investors not only retreating from high-risk assets but fundamentally reassessing the stability of the international financial system. Gold’s unique position as an asset outside the credit system, unlinked to direct sovereign obligations, provides it with distinct advantages during periods of geopolitical uncertainty and institutional doubt.