Gold prices soar $100 an ounce in 1 week, but UAE shoppers have already done their buying
First week of Oct. sees major buying as resident shoppers made full use of low rates
Dubai: Gold prices have shot up nearly $100 an ounce - or Dh12.75 a gram for 22K - in a week, but there aren't many disappointed shoppers around. Or retailers.
Shoppers in the UAE who bought or paid an advance booking on gold between September 29 and October 8 have plenty of reasons to be pleased, with bullion prices soaring past $1,900 an ounce and currently trade at $1,919. During the 10 day period starting September 29, gold was in the $1,820 plus range, and with some analysts believing it might fall to under $1,800.
Gold is now trading at $1,912, dropping from $1,919. The UAE gold rate is Dh215.5 a gram for 22K.
On September 7 (which was a Saturday), the whole equation changed after the start of hostilities between Israel and Hamas.
From a gold consumer’s perspective, it could have been much worse – at one point earlier today prices had hit $1,934 during trades, which is also the highest since September 18. As things stand now, those prices could be tested again, and even see a run towards $1,950.
“From what we could make out based on demand since September 29, a majority of UAE shoppers brought forward their gold buying for the festival season, especially Diwali and Dhanteras by mid-November,” said a gold jewellery retailer. “These days, shoppers are not going to test the markets by waiting to buy.
“They buy at the first signs of a dip.”
UAE gold rate
What does all this signify for UAE gold rates and shopper demand? Between October 6 to October 15, the gold rate has seen a Dh12.75 increase per gram. “It has brought to a near halt resident shopper demand, which was expected,” said another gold retailer. “We are hoping that some tourists will still see current prices as favourable for a purchase.”
And in the first few days of October, they had plenty of that. Retailers say that a lot of the buying done in the first week of October will reflect closer towards November 15, because shoppers had put up a 10 per cent payment and with the promise of completing the purchase during the festival season next month. This year’s Indian festival of Diwali is on November 12, while Dhanteras falls on November 10.
"UAE gold market might have seen a near full month's worth of buying or booking happening in October first week," said a market source. "The best part is that shoppers fully realise the value of price lock-in schemes at the right time."
Plus, there is still another 20 odd days to go before the Indian festival season starts in earnest...