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DUBAI: Gold prices are finally delivering real benefits for shoppers in the UAE and elsewhere – overnight, gold prices fell more than $30 an ounce to $1,662, levels last seen in April 2020. (That’s when the price of gold started to rise. In the two-year “gold run”, the price of gold broke the $2,000 level twice.
So, should UAE shoppers buy/book today and hope the price drop will continue into the weekend? A gram of 22K UAE gold is priced at Dh189, falling below Dh190 for the first time in a long time.
Earlier on Friday, the price of the 22K had been set at Dh189.25. (For updates, visit this Page. )
“From 8pm yesterday, when Dh189 was confirmed, shoppers came to the store to take advantage of the discount,” said Abdul Salam KP, vice president of Malabar Gold & Diamonds. “When booking, most buyers use our online portal to commit to buying ahead of Diwali.
The magnitude of the drop in bullion prices really surprised everyone, including shoppers and jewelry retailers.
– Abdul Salam KP
Before yesterday’s closing price of Dh189, the lowest price this year was Dh191.75 on July 21. Gold has been trading above Dh200 a gram for its best time in nearly three years, peaking at mid-230 AED.
“Tourists have started buying gold and jewellery, mostly coins and basic chains and bracelets,” said one retailer. “Should see more today and hopefully they will start looking at higher priced collections. Last night (September 15) on Gold Souq it really felt like the buzz was coming back, something that hasn’t been in over three years .”
10%
Prices started to fall from December 31, 2021, when gold was at $1,830 an ounce. Today, it’s priced at $1,662. Will the head be down?
What about UAE consumers?
So far, most major jewelry retailers have offered pre-order or price-lock deals to resident buyers. “With Diwali (Oct 22) so close, there is always pent-up demand that will unleash today. Shoppers have learned their lesson – if they don’t buy today, they will definitely book at today’s price. They won’t wait Just did that tonight.”
The message is clear – don’t wait. If bullion prices can drop more than $30 an ounce in a few hours, the same will happen with a rally.
Every time we see prices drop, shoppers are repurchasing gold. They just have to convince them to buy at the right price.We keep bookings open and will have a separate offer for Diwali
– Joey Alucas
Tourist calls
It also happened that tourists planning to visit in October also called on their jewellery retailers to confirm their purchases at current prices. Wedding-related orders also often come in from overseas. “Many actual orders that happen today (or tomorrow) will actually be in the red by Oct. 22,” the retailer said. “Until now, the average gold shopper realized they had to time their purchases like they would buy stocks.”
So what happened to gold?
Gold prices were caught up in fears that inflation could impact global economic growth opportunities. Hopes for a smooth run in markets and commodities have been dashed ahead of another rate hike by the Federal Reserve late next week. Stocks in the U.S. and Asia have slipped over the past few hours, and gold has been another victim. (Bitcoin and Ethereum also took a hit.)
“Unless the market is surprised by the uptick in inflation expectations, gold prices should stabilize above the $1,650 area,” said Edward Moya, senior market analyst at consultancy Oanda.
For now, that’s enough for UAE gold buyers.
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