Dubai – In one of the most significant single – day declines in recent weeks, the Dubai Gold Rate has dropped by approximately Dh11 per gram. However, consumers in the UAE are reluctant to rush into their next gold purchase and are instead waiting for even more substantial price drops.
As of the close on May 7, the local price for a gram of 22K gold stood at Dh367.75, a notable fall from the previous closing price of Dh378.5. This price is also just shy of the all – time high of Dh381.75 per gram, which was reached earlier this week.
According to shopper sentiment, they will consider buying gold jewellery only if the price of gold continues to decline to around Dh350 – Dh355 per gram. “People believe that prices above Dh370, and even Dh360, are inflated, so they are hesitant to make purchases at these levels,” stated a gold retailer. “The only exception was on April 30, during ‘Akshaya Trithiya’, when the price of 22K gold was Dh369.”
The question remains: Can gold prices fall even further? Based on emerging trends, there are indications that the Dubai Gold Rate could stabilize around Dh360 per gram, and there is a good chance it might even reach as low as Dh355, according to the retailer. “However, returning to the Dh350 level will likely be a challenge.” Coincidentally, the lowest price in the past 30 days was Dh351.25, recorded on April 10.
Will this latest price drop lead to a busy weekend for gold sales? The recent decrease in gold prices might be sufficient to attract tourists to the Gold Souq, as well as jewellery stores in malls and on the high street. “Tourist shopping in the gold market mainly involves the purchase of new gold jewellery,” said Anil Dhanak, Managing Director at Kanz. “In our stores, we’ve observed that for every 10 purchases made by tourists, one or two involve gold exchanges.”
“UAE residents, on the other hand, can afford to wait and monitor the market for the ‘right’ price, whenever that may be.” So, will a further price drop to around Dh360 be enough to entice them back into the market? Or will the price of 22K gold have to reach Dh350 per gram before they start buying again?
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