Gold prices face more pressure after another $60 drop to $2,617
Price drops catch UAE shoppers planning gold jewellery exchanges by surprise
Dubai: Gold prices have crashed by another $60 plus to $2,617 an ounce – and far removed from the all-time peak of $2,790 levels just days before the November 5 US Presidential election. (By 12.30 pm UAE time, the bullion rate was at $2,602.97.)
The UAE gold rate for 22K is at Dh293.50 a gram and should drop further, something that resident shoppers and tourists will find extremely in their favour.
But the overnight drop by $60 an ounce also caught many potential shoppers off-guard, as they were hoping to cash in on the Dh301 a gram level from just 48 hours ago. (The all-time peak for 22K UAE gold rate is Dh311.25.)
Gold had been under pressure since it became clear that Donald Trump will be the next US President. The dollar has gained strength and that was always going to be counter-productive for high gold prices.
“The dollar’s near a four-month peak, (thus) weighing on the precious metal,” said Fadi Al Kurdi, founder of FFA Kings. “With the greenback strengthening, gold could remain under pressure.”
Will that pressure translate into the price dropping below $2,600? Shoppers will definitely hope that’s the path gold takes, especially with the holiday buying season coming up and gold jewellery being a favoured choice during this period.
There are two shopper and price factors at work here, says Anil dhanak of Kanz Jewels. “Gold shopping by tourists to the UAE is never related to the actual price on that day,” he said. “The only price that matters to them is the cost difference between, say, what it costs in India and in Dubai. The number two reason tourist shoppers go for is the variety and designs available.
“In short, it's seasonal business from November all the way to April next.”
Which is why any further softening in gold rates will be downright handy for shoppers.