Dubai gold trades below Dh500 for second day as Diwali buying season begins
By Business & Property Desk2 min read
Gold prices in Dubai held steady on Wednesday, with the 24-karat variant trading below the Dh500 mark for a second consecutive day, offering a timely reprieve for shoppers ahead of the Diwali festival, one of the busiest periods for gold purchases in the United Arab Emirates.
Prices steady below Dh500
At the market open on Wednesday, 21 October 2026, the 24-karat gold price was quoted at Dh496 per gram, down from Dh497.25 a day earlier. Other variants also edged lower: 22-karat at Dh459.25, 21-karat at Dh440.25, 18-karat at Dh377.5, and 14-karat at Dh294.25 per gram.
Diwali boost for buyers and retailers
The decline below Dh500 brings significant relief to jewellery buyers in the UAE just as Diwali approaches, a time when gold ornaments such as necklaces, bangles, and earrings are in high demand. The lower price makes gold jewellery more affordable for shoppers and allows those with a fixed budget to buy heavier pieces.
Retailers expect the decline to encourage customers who had postponed purchases due to high prices, potentially boosting sales during the festive season. For Indian expatriates, who traditionally view gold as an auspicious purchase during Diwali, the price drop provides an added incentive to buy jewellery for themselves and their families.
Global factors and analyst comment
Globally, spot gold traded at $4,120 per ounce as of 9:10am UAE time on Wednesday, down 0.10 per cent. Silver declined by 0.74 per cent to trade at $57.4 per ounce.
Vijay Valecha, chief investment officer at Century Financial, said gold has recently traded in a tight range, with elevated oil prices adding pressure, fuelling inflation concerns, and keeping US Treasury yields elevated. He noted that a subsequent rise in the US dollar also adds pressure to bullion. Despite these headwinds, Valecha observed that the precious metal has remained resilient above the $4,100 mark so far in October, following a decline of more than 6 per cent last month.
“One of the primary drivers of gold’s strength is investment demand, as shown by surging holdings in global gold ETFs,” Valecha said. “Total known gold ETF holdings, according to Bloomberg, reached a four-year high of 101.368 million ounces as of today, up 5.37 per cent from the year-to-date low of 96.2 million ounces on 20 July.”
On the technical front, he said gold prices remain rangebound between $4,070 and $4,220 this month, so a break on either side will be needed before a strong medium-term direction can be established. “Silver seems to be rebounding from a horizontal support from the lows of 24 June, 17 July, and 14 October, with nine-period RSI recovering from oversold territory, suggesting a market structure tilted towards the upside in the immediate term,” he added.
