Gold and silver prices slipped on Monday as global markets remained volatile, weighed down by a mix of technical corrections and improving geopolitical sentiment. Analysts said the decline followed weeks of strong gains, prompting investors to lock in profits while safe-haven demand weakened.
Globally, spot gold fell 0.83% to $4,079.38 per ounce at 10 a.m. UAE time, while silver dropped 0.53% to $48.34 per ounce. In Dubai, gold prices also retreated, with 24K trading at Dh491.50 per gram. Other categories followed suit, with 22K at Dh455, 21K at Dh436.25, and 18K at Dh374 per gram.
The drop comes after gold’s record-breaking rally earlier this month. On October 21, 24K gold had reached an all-time high of Dh525.25 per gram, marking a nine-week surge that saw the metal rise to unprecedented levels. However, it has since suffered its steepest single-day fall in more than a decade, plunging over 6%. Buyers who purchased during the Diwali period at peak prices have since seen the value of their holdings decline sharply.
Dilin Wu, Research Strategist at Pepperstone, said gold’s recent correction was driven by technical factors. “Bulls had pushed gold higher for nine consecutive weeks, with the RSI (Relative Strength Index) remaining in overbought territory since early September,” Wu noted. “This indicates that bullish positions were overly concentrated, signaling the need for a healthy corrective pullback.”
Market analysts also pointed to improving U.S.-China trade relations as a key factor behind the decline. Nishin Thaslim, Chairman of Nishka Jewelry, said optimism around a resolution to the trade dispute had reduced demand for safe-haven assets. “The trade war between China and the U.S. is almost nearing an end,” he said. “This has increased global optimism and led to a dip in gold prices.”
Wu added that expectations of easing geopolitical tensions were further supported by reports that China might relax rare earth export restrictions and that the Trump administration could extend the 90-day tariff pause. “Consequently, safe-haven flows that had supported gold shifted back into risk assets,” she explained.
Additional pressure came from the CME’s 5.2% increase in margin requirements for gold and silver, which curbed short-term speculative buying.
Wu expects gold to remain in a “neutral to slightly bearish range” this week, depending on risk sentiment and central bank developments. “With an October rate cut already priced in, markets are focused on Fed Chair Jerome Powell’s tone after the FOMC meeting,” she said. “Any signals of cooling inflation or balance sheet adjustments could bolster expectations for a December rate cut, lending some support to gold.”
However, she cautioned that progress in U.S.-China trade talks at the upcoming APEC summit could further reduce safe-haven demand, keeping downward pressure on prices in the near term.
