Gold and silver prices fell on Monday morning as global market volatility continued, driven by a mix of technical and fundamental factors, according to market analysts.

Globally, spot gold prices slipped by 0.83 per cent to $4,079.38 per ounce at 10am UAE time, while silver dropped 0.53 per cent to $48.34 per ounce, extending its recent downward slide.

In Dubai, 24K gold was priced at Dh491.50 per gram on Monday morning, while 22K, 21K, and 18K fell to Dh455, Dh436.25, and Dh374 per gram, respectively.

Dilin Wu, Research Strategist at Pepperstone, explained that gold had previously surged for nine consecutive weeks, with its relative strength index (RSI) remaining in overbought territory since early September.

“This indicates that bullish positions were overly concentrated, signalling the need for a healthy corrective pullback,” Wu said.

Gold had reached a record high of Dh525.25 on October 21, buoyed by safe-haven demand amid global uncertainty. However, it soon saw its sharpest one-day decline in over a decade, plunging over six per cent — a setback for buyers who had invested heavily during Diwali.

Global Drivers Behind the Decline

Nishin Thaslim, Chairman of Nishka Jewelry, attributed part of the decline to improving global sentiment. “The trade war between China and the US is almost nearing an end,” he said. “This has increased global optimism and led to a dip in gold prices.”

Analysts added that expectations of China easing rare earth export restrictions and the Trump administration extending the 90-day tariff pause have reduced geopolitical risks, shifting investor flows away from safe-haven metals toward risk assets.

Wu noted, “Consequently, safe-haven flows that had supported gold shifted back into equities and other risk assets. Additionally, the CME’s 5.2 per cent increase in margin requirements for gold and silver dampened short-term buying momentum.”

Outlook for the Week

Wu expects gold to trade within a “neutral to slightly bearish range” this week, contingent on investor sentiment and macroeconomic developments. “With an October rate cut already largely priced in, attention is turning to Fed Chair Jerome Powell’s tone after the FOMC decision,” she said.

Acknowledgment of easing inflation or an end to balance sheet runoff could reinforce expectations for a December rate cut, offering some support to gold. However, any emphasis on lingering policy uncertainty or tariff effects could further pressure prices.

Market watchers also see the upcoming APEC summit, where US and Chinese leaders are expected to meet, as a potential catalyst. “Confirmation of trade concessions without escalation would likely reduce safe-haven demand, putting short-term pressure on gold,” Wu added.

As investors await clearer signals, gold and silver markets remain poised for another week of cautious trading amid fluctuating risk sentiment and global economic shifts.