Gold prices remained stable on Wednesday morning, with global spot prices dropping to $3964.9 per ounce by 10am UAE time. Silver also saw a slight decline, standing at $47.68 per ounce. In Dubai, 24K gold prices edged up to Dh478.50 per gram, while 22K, 21K, and 18K gold were priced at Dh443, Dh424.75, and Dh364 per gram, respectively.
Analysts attribute the current market conditions to a brief phase of consolidation following substantial rallies. According to Vijay Valecha, Chief Investment Officer at Century Financial, gold has demonstrated solid performance amidst ongoing economic uncertainties and trade tensions. However, recent reports suggesting easing tensions between the US and China have led to a decline in safe-haven demand. Additionally, a profit-booking trend has emerged following the significant price increases seen earlier this year.
Valecha explained that investors who had held onto gold since the start of 2025 had seen returns of around 67%. Given the price pullback, many chose to secure profits, although the precious metal is still up 51% year-to-date, significantly outperforming other asset classes. Despite the correction, Valecha believes the current period is crucial for gold, with recent price movements indicating a potential bearish consolidation. He noted that the pullback from October’s record high could continue further, with technical resistance at the 9-day simple moving average of $4,015. Until gold manages to break through this level, it may face challenges in sustaining upward momentum.
Should gold fall below $3,950, the next support level is seen at $3,887, based on recent lows. However, Valecha remains optimistic about the long-term outlook for gold, citing macroeconomic factors that continue to support its value. For instance, the ongoing US government shutdown is beginning to impact economic sentiment, with potential delays in important data and an unclear Federal Reserve policy outlook adding to the uncertainty. These factors could make gold a more attractive asset in the coming months.
Geopolitical risks, as well as strong demand from central banks, also contribute to a positive backdrop for gold. Valecha concluded that while short-term declines or sideways movement are possible, the overall trend for gold remains upward. A break below key support levels would suggest a deeper pullback, but this could also signal a healthy correction before the next rally.
For more insights on gold market trends, you can read our detailed report on Dubai gold price swings.
With market conditions fluctuating, investors will need to keep a close watch on price movements as gold continues to navigate a phase of consolidation.
