Gold's up-and-down prices in November lead to sharp rise in UAE investors, digital trades
Digital trades see rise in UAE investors as gold prices softened in November
Dubai: This time, more investors in the UAE seem to be wanting to get into gold – including those who would earlier only look at Bitcoin or other crypto assets. Gold price movements in the last 30 days have also convinced an increasing number of investors in jewellery to look at gold bars, coins, or gold certificates.
Between late October, when gold was at its highest to date of $2,790 an ounce and now, a lot has indeed changed in investors’ approach to the asset. Between November 5, when it was at $2,740, and November 15, when gold slipped to $2,564, investors were putting in sizeable savings into gold as non-jewellery purchases.
Buying the gold price dip
This way, these shoppers feel, they can save on making charges and thus improve their chances to pick more grams of gold.
The UAE gold rate in the last 10 days have ranged between Dh305 a gram for a gram of 22K to today’s Dh294.25. (For regular updates on gold and remittance rates, check out this link.)
$167
November’s up and down prices
“There was a price dip to $2,564 on November 15 and that was a comfort level for buyers to add to their gold holdings,” said an analyst. “There was a sense of buying the dip. This also pulled in many first-time investors, because some of their other options such as Bitcoin was barreling past $90,000 and was too costly to get into.
"Bitcoin's record rally to $98,453 on November 22 might have forced many investors to wait for it to cool off. But those meant they had funds to put in other assets - that's where gold benefitted."
If they were not buying, UAE investors were trading in digital gold through specialist platforms, much in the same way that they would in stocks.
From '1- to 100 grams of gold'
“We observed retail customers purchasing gold in quantities from 1 gram to 100 grams,” said Gaurang Desai, Managing Director of Equiti Gold. These investors ‘aim to lock in prices and take advantage of market opportunities’.
“We are (also) in discussions with family offices and fund houses that are interested in allocating a portion of their investment portfolios to digital gold,” said Desai. “This shift could lead to transactions involving anywhere from 5 kg to 40 kg of gold per customer, reflecting a growing trend towards diversifying investments in a secure and accessible manner.”
This shift could lead to transactions involving anywhere from 5 kg to 40 kg of gold per customer, reflecting a growing trend towards diversifying investments in a secure and accessible manner.
Other trading platforms are seeing the same trends of higher than average investor activity in gold through the last 4 weeks.
Over the last 10 days, gold prices have staged a partial recovery, to $2,716 on November 22, before slipping down to this morning’s $2,631 an ounce.
Clearly, gold prices are yet to find any price stability. But whenever there is some softening over a few days, that’s when investor activity picks up significantly.
“Whereas UAE consumers would rush to gold jewellery shops when prices dropped in the past, today, they are looking at multiple ways to buy gold,” said an analyst.
Jewellers push lower making charges
Gold jewellery retailers say they understand shopper concerns about making charges as part of the costs.
"Some shoppers might look at bars or coin options, but for those who prefer jewellery - and that's the majority - we are offering collections with much lower making charges," said Abdul Salam K. P., Vice-Chairman of Malabar Gold & Diamonds. "That's making charges of less than 2% compared to a minimum of 5% on other collections. For these shoppers, they understand that a 2% making charge is negligible compared to the double-digit yearly price increases gold is having."
Some shoppers might look at bars or coin options, but for those who prefer jewellery - and that's the majority - we are offering collections with much lower making charges.
- Justin Varghese, Editor of Your Money
More to follow...