Gold prices in Dubai experienced a significant drop of Dh7 per gram on Monday evening, mirroring a global decline of over two percent attributed to heightened fears of a US recession, which triggered widespread selling. According to data from the Dubai Jewellery Group, the 24K gold variant was trading at Dh289.75 per gram by Monday evening, a notable decrease from Dh296.75 per gram at the market's opening. This marked one of the most substantial single-day declines in recent times.
Other variants of gold, including 22K, 21K, and 18K, were priced at Dh268.25, Dh259.75, and Dh222.75 per gram, respectively. Meanwhile, spot gold saw a decrease, trading at $2,405.78 per ounce, a drop of 1.45 percent by 7.50 pm UAE, compared to $2,447.5 per ounce at 9 am UAE time.
Despite the current downturn, analysts predict this to be a temporary setback. Julius Baer, a Swiss bank, attributed the market sell-off to weak economic data, escalating geopolitical tensions in the Middle East, and underwhelming earnings reports, especially from major technology companies. The bank highlighted that lower oil prices reflect concerns over economic data rather than geopolitical issues, viewing the recent soft data as a brief interruption in the ongoing economic recovery.
William Jackson, chief emerging markets economist at Capital Economics, noted that fears of a US recession have significantly impacted emerging markets (EM) equities, which are already displaying clear signs of weakness. He emphasized that the series of weaker-than-expected US data released last week has unsettled global financial markets, leading to substantial sell-offs in EM equity markets, notably in East Asia.
