Dubai Gold Drops Dh21 After Sharp Year-End Rally

Dubai gold drops Dh21 from record highs after sharp year-end rally

Dubai: Gold prices in Dubai have pulled back sharply from last week’s record levels as traders booked profits following a powerful year-end rally. By Tuesday morning, 24-karat gold was priced at Dh525 per gram, down Dh21.25 from its all-time high of Dh546.25 reached on December 27. The 22-karat variant eased to Dh486, compared with a peak of Dh505.75 during the same period.

Market participants described the move as a technical correction rather than a change in trend, noting that thin year-end liquidity and stretched indicators amplified the price swings after gold surged to uncharted territory earlier this month.

December rally marked by sharp and rapid price moves

December proved to be a volatile month for Dubai gold prices. The month began with 24-karat gold trading near Dh511.75 on December 1 before slipping into the Dh503–507 range during the first week as global markets digested mixed economic signals.

Momentum turned decisively positive from mid-month. Prices crossed Dh518 by December 13, moved above Dh522 by December 18, and accelerated sharply in the final stretch before the holidays. By December 23, gold had climbed to Dh539.75, before surging past Dh545 on December 26. The rally peaked on December 27 and 28, when prices briefly touched Dh546.25, the highest level ever recorded in Dubai.

A similar pattern was seen in 22-karat gold, which rose from Dh473.75 at the start of the month to above Dh505 at its peak before retreating alongside broader market cooling.

Profit-taking drives correction

The pullback followed gold’s steepest two-day decline in several months, largely driven by profit-taking after an exceptional run. Precious metals had rallied strongly into year-end on the back of safe-haven demand, heavy central bank purchases and expectations of looser global monetary conditions in 2026.

Lower interest rates, following multiple cuts by the US Federal Reserve this year, reduced the opportunity cost of holding non-yielding assets such as gold. At the same time, geopolitical tensions and concerns about global growth continued to support investor demand, even as prices corrected.

Silver steadies after heavy sell-off

Silver, which had outperformed gold during the rally, showed signs of stabilising after recording its biggest one-day drop in more than five years. The metal traded near $73 an ounce after plunging around 9% in the previous session.

The sharp sell-off followed an aggressive run-up that left the market vulnerable to margin calls and forced liquidations. In response, some exchanges raised margin requirements on certain futures contracts, prompting leveraged traders to scale back positions.

Despite the recent fall, silver remains one of the strongest-performing commodities of 2025, supported by tight physical supply, strong investment demand and speculative interest, particularly in Asian markets.

Strong fundamentals continue to support precious metals

Analysts note that both gold and silver are on track for their strongest annual performances since 1979. Record central bank buying, steady inflows into exchange-traded funds and a softer interest-rate environment have underpinned prices throughout the year.

Lower borrowing costs continue to favour commodities that do not generate yields, while ongoing geopolitical frictions reinforce the role of precious metals as portfolio hedges. These broader dynamics suggest that while short-term volatility may persist, underlying support for gold prices remains intact.

In Dubai, movements in gold prices are closely watched not only by investors but also by businesses and individuals making long-term financial plans. Market stability and regulatory clarity in the emirate remain important considerations for capital allocation decisions, including those linked to business setup in dubai