24K gold drops to Dh481.50 amid easing US-China tensions and higher margin requirements
The gold market witnessed a notable correction on October 27, 2025, as gold prices fell sharply in Dubai, dropping by up to Dh10 per gram during the day. The sudden decline comes after weeks of strong gains that had pushed the precious metal to record highs earlier in the month.
According to Khaleej Times, the price of 24K gold fell to Dh481.50 on Monday evening, down from Dh491.50 in the morning. Similarly, 22K, 21K, and 18K gold also saw significant declines — slipping to Dh445.50, Dh427.25, and Dh366.25 per gram, respectively.
The fall reflects a broader global pullback, with spot gold prices dropping by nearly 3% to $3,989.5 per ounce, while silver slid 3.84% to $46.75, extending its downward trend.
Why gold prices fell so sharply
Experts attribute the latest dip to a mix of technical corrections and easing geopolitical tensions.
Dilin Wu, Research Strategist at Pepperstone, noted that gold had been on a nine-week rally prior to this correction, with the Relative Strength Index (RSI) staying in “overbought territory” since early September.
“Bullish positions were overly concentrated, signaling the need for a healthy corrective pullback,” Wu explained.
Gold had reached an all-time high of Dh525.25 per gram on October 21, driven by global uncertainty, high inflation expectations, and safe-haven demand. However, the sudden reversal last week marked the sharpest one-day fall in over a decade, with prices retreating more than 6%.
Many retail investors who purchased gold and jewelry during Diwali at peak prices are now facing short-term losses as market volatility continues.
Easing US-China tensions cool safe-haven demand
According to Nishin Thaslim, Chairman of Nishka Jewelry, one of the main factors driving the decline in gold prices is the improving outlook for global trade relations.
“The trade war between China and the US is nearing an end,” Thaslim said. “This has increased optimism in financial markets and reduced safe-haven demand for gold.”
Market analysts expect that China may soon ease rare earth export restrictions, and the US administration could extend its 90-day tariff pause, both of which are boosting investor confidence in equities and risk assets.
As investors shift funds from gold to riskier assets, demand for the yellow metal has softened.
Technical factors add pressure
The correction in gold prices is not solely due to geopolitical developments. Analysts also pointed to technical adjustments and changes in market mechanics.
The Chicago Mercantile Exchange (CME) recently raised margin requirements for gold and silver by 5.2%, dampening short-term buying momentum among traders.
Wu added that gold is likely to trade within a “neutral to slightly bearish range” this week, depending on risk sentiment and upcoming economic data.
Market participants are closely watching the Federal Reserve’s October meeting and Fed Chair Jerome Powell’s remarks, which could set the tone for the December policy decision.
If the Fed signals an upcoming rate cut, it could support gold prices by weakening the US dollar. Conversely, any indication of policy uncertainty or ongoing tariff pressures could weigh further on the metal.
Global perspective: gold’s volatility continues
The global gold market remains unpredictable, with prices reacting sharply to shifts in interest rate expectations, inflation data, and geopolitical developments.
Although gold hit record highs earlier this month, analysts say that the recent correction was inevitable after prolonged bullish momentum.
Some experts believe that a short-term decline could provide long-term investors with an entry opportunity — especially if central banks resume their gold-buying programs later this year.
“Gold remains a key hedge against inflation and economic uncertainty,” one analyst noted. “But in the near term, the market is taking a breather after an extended rally.”
What’s next for gold buyers in Dubai
In Dubai, one of the world’s leading gold hubs, buyers are being advised to monitor prices closely before making new purchases. The recent drop could encourage renewed interest among consumers ahead of the festive season, though volatility may persist.
Jewelry retailers expect a short-term dip in demand as customers wait for prices to stabilize. However, long-term investors see the pullback as an opportunity to accumulate gold at lower levels.
“Gold prices fall, but they never stay down for long,” said a Dubai-based jeweler. “This correction is part of a healthy market cycle.”
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