Next Price Dip in Gold Market: Will It Bring Opportunities for Investors?

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Publish : 20 Oct 2025, 05:42 PM

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Analysts advise the retail investors to hold onto their cash and enter the global gold market during price dips as they believe a decline of five to ten per cent in gold prices offers a good entry opportunity for investors looking to capitalise on the ongoing rally, because the precious metal trades near record highs.

Gold price hit a record of USD 4,378.98 per ounce. On Monday morning, it was trading at USD 4,266.2 an ounce in the UAE at 9 am (local time), an increase of 0.39 per cent.

However, the spot gold was steady at USD 4,248.93 per ounce on Monday morning at around 9.25 am (local time). It opened higher in early trade, but eased off later.

Investors continue to be influenced by interest rate cuts by the US Federal Reserve and US-China trade discussions.

Prices of gold in Dubai in the United Arab Emirates (UAE), which is also known as the City of Gold, also hit a record high as 24K surpassed Dh (Dirham) 500 per gram for the first time.

On Monday at 9 am (local time), 24K opened higher at Dh 514 per gram, up Dh 1.75 from last week’s close. Similarly, 22K, 21K, and 18K opened higher at Dh 476, Dh 456.5, and Dh 391.25, respectively.

Chris Weston, head of research at Pepperstone, said, "What are the probabilities of gold continuing to go up relative to going down, knowing that everyone's long positioning is very rich in gold now across all products? There are a lot of people who want to buy (gold) at any kind of weakness right now."

"If I look at the checklist of reasons why gold has gotten to where it's, there's nothing really out there that suggests we're going to see a 20 to 30 per cent crash. There are reasons, but they’re very few. If I look at the checklist, if anything, any kind of pullback, a decent five to 10 per cent, based on positioning, will give everyone a strong entry point for another run higher," he added.

The trade expert noted that one of the key drivers behind the gold rally is the continued accumulation of gold by central banks in China and other emerging markets.

Ipek Ozkardeskaya, senior analyst at Swissquote, said, "Trade tensions between the US and China are fully back after China restricted rare earth metal exports to the US and the US threatened China with 100 per cent tariffs."

However, Jerome Powell, chair of the Federal Reserve, gave a fresh hint last week about an upcoming rate cut by the end of this month, and his words were the only solid indication of what the Fed might do in the absence of economic data as the US government remains shut.

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Advice for the retail investors

Following a strong rally, Chris Weston believes that institutions still underown the yellow metal.

“It's largely uncorrelated to a lot of other markets. So, unless the correlation with gold really picks up with equity and fixed income, then that lack of correlation still makes it very attractive for institutional investment managers. What we've seen is the start of a long-term trend amongst institutional investors. Whilst gold positioning is rich, it's still very much under-owned by institutional investors, so people are talking about this change of a 60-40 portfolio of 60 per cent equity and 40 per cent fixed income to now a 60-20-20 portfolio, where gold’s only 20 per cent so that's a huge amount of money still to come in,” he added.

He further advised retail investors to pay close attention to position sizing.

Afshin Setoudeh, chief marketing officer at Traze, said market conditions have favoured traders over the past 18 months but warned against complacency.

"You need to be cautious. There are corrections of USD 100-150, but you're not here just to jump in — you're here to trade strategically. Learn from the market, apply what you’ve learned, and ride the wave. Don’t hesitate, but don’t act impulsively either," he added.

Source: Khaleej Times

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