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Gold and jewellery buyers in the UAE who purchased at peak rates during Diwali are now facing losses as prices dropped sharply in the days following the festival. Analysts and jewellers report that the decline has cost buyers thousands of dirhams, though many residents continue to view gold as a long-term investment.
According to Vijay Valecha, Chief Investment Officer at Century Financial, 24-karat gold in Dubai surged to Dh525.25 per gram on October 21, driven by festive demand and global safe-haven inflows. However, by the evening, prices fell to Dh485 per gram, a drop of nearly Dh30 per gram. Similarly, 22-karat gold declined from Dh486 to Dh458 per gram, reflecting the steepest one-day international price drop since 2013.
Valecha noted that a buyer who purchased 10 grams of 24-karat gold at the peak would face an unrealized loss of about Dh300, while a 100-gram purchase could have lost Dh3,000. Prices continued to fluctuate, with 24K, 22K, 21K, and 18K gold trading at Dh496.5, Dh459.75, Dh440.75, and Dh377.75 per gram, respectively, as of Thursday morning (Oct 23).
Long-term perspective still valued
Despite short-term losses, many UAE residents see gold as a stable long-term asset. Vinita Hirani, a long-time resident, said, “With so much going on in the geopolitical climate, I would rather park my cash in an asset like gold because it has a long-term stability value compared to Bitcoin or other assets.”
The recent price pullback is attributed to global profit-booking after weeks of record highs, according to Varun Bafna, co-founder of Amari Capital. Anuraag Sinha, Managing Director at Liali Jewellery, added that a Diwali purchase of 10 grams at peak (Dh5,250) now costs Dh4,950, resulting in hundreds of dirhams in paper losses per 10 grams, excluding additional costs like making charges or design premiums.
The post-Diwali drop highlights the volatility in gold markets, reminding investors and shoppers that while gold is traditionally seen as a safe haven, short-term fluctuations can impact immediate returns.
