Gold prices fell by Dh0.75 per gram when the markets opened on Tuesday (May 21) following a significant surge in the previous session. At 9am UAE time, the 24K variant of gold was traded at Dh292.25 per gram, a decrease from Dh293.0 per gram at the previous day's market close. The other variants, including 22K, 21K, and 18K, were priced at Dh270.5, Dh261.75, and Dh224.5 per gram, respectively. The 24K variant had reached Dh296 per gram on Monday afternoon.

Internationally, gold was trading at $2,414.41 per ounce, marking a 0.5% decline at 9:10 am UAE time. Diego Colman, a contributing strategist at dailyFX, attributed this to optimistic US inflation data fueling speculation about the Federal Reserve potentially adjusting its monetary policy earlier than expected, consequently boosting precious metals, and bringing gold close to its historical high.

Julius Baer suggested that the narrative of central banks transitioning from US Treasuries to gold has been driving the recent surge in gold prices. However, it pointed out that this record-breaking rally for gold appears to have paused, at least for the time being, impacting both central banks and investors alike.

The Swiss bank's analysts highlighted that global gold demand has remained stagnant over the past decade, with the remarkable upswing in gold prices being attributed to an increase in buyers' willingness to pay. Despite all gold-buying central banks except China and Russia increasing their US Treasuries holdings since 2022, gold continues to serve as a hedge against economic and systemic risks in financial markets, particularly against further US dollar weaponization.