Gold prices crash, US stocks soar as 'Trump trade' takes over

Strong dollar after Trump's win is pushing gold lower - that's good for shoppers

Dubai: Gold prices have come crashing down as global markets enter a ‘Trump trade’ reset. After shooting up to its highest-ever $2,790 an ounce level last week, gold has dropped to $2,655 now.

In fact, just over the last few hours, bullion prices have been down $85 per ounce. All of these price declines are being reflected in the UAE gold rate, with a gram of 22K at Dh298.75 compared to Dh307.75 on Monday (November 4). It was at Dh311.25 on October 30, the highest ever.

Once it became clear that Donald Trump would be the next US President, a lot has been changing in the global markets. US stocks gained 1,500 points overnight, Bitcoin has broken the $75,000 level, and the dollar is gaining.

Click here to see the latest gold and remittance rates in UAE

With the dollar picking up strength, it was a given that gold prices would soften. But what the markets – and shoppers – are seeing right now is more than just a price correction. When prices have dropped by more than $100 in less than 48 hours, it is a major reset in itself.

There could be a correction by up to $200 from peak levels. My forecast is that gold will not see any new highs right through to the end of the year.- Anil Dhanak of Kanz Jewels

Is it time for gold shoppers to celebrate and start on ‘buying the dip’? Many in the UAE had bought at peak prices last week because of the Indian festivals of Diwali and ‘Dhanteras’, traditionally a strong period for such purchases.

Even then, many shoppers will be hoping that gold prices continue to slide, especially as the UAE is starting to see more tourist arrivals.

A drop by up to $200?

“Gold prices had to come down at some point – and the Trump win just sealed the deal,” said Anil Dhanak, Managing Director of Kanz Jewels. “There could be a correction by up to $200 from peak levels. My forecast is that gold will not see any new highs right through to the end of the year.”

Indeed, this is the first major price reset gold has seen for quite some time now. Market analysts say that if gold price now lowers to around $2,600, it will likely see some stability at that level.  

Advantage time for shoppers

For tourists and visitors to the UAE, gold's drop couldn't have come at a better time. In fact, jewellery retailers are hoping that tourist shoppers will lead the way in creating fresh demand over the next few weeks. "If gold continues to drop, or even settle at $2,600 levels, we can safely say that tourists will not be holding back on purchases," said a retailer.

"UAE resident shoppers may need more time to get back to shopping for gold, having made their purchases between October 29-November 1 for Dhanteras/Diwali."