Gold gains $100 in 30 days to break $2,700 barrier ahead of key Diwali period
Shoppers try to lock in gold prices before Diwali even at current record prices
Dubai: Gold buyers in the UAE and everywhere else have to deal with a new price record - $2,700 an ounce. And it has taken less than a month for the new all-time high to be struck after the asset went past $2,600 on September 20.
With the Indian festivals of Diwali and Dhanteras coming at the end of this month, shoppers are scrambling to lock in rates.
The UAE gold rate was at just over Dh292 a gram for 22K on October 7. “Any gold buyer who managed to do an advance booking at that rate would be lucky given how gold prices are behaving,” said a jewellery retailer. “Since then, the UAE gold rate has risen to Dh301.5 a gram yesterday (October 17).
“There seems to be no point in trying to guess how much more gold will rise. Already, people are talking about $2,800 happening this year itself.”
Today (October 18), the UAE gold rate is at Dh304 a gram for 22K.
Some jewellery retailers are saying this price level is probably the peak gold can reach in this period. "It does appear that gold prices have reached a 'satisfactory level' (from an investor's perspective)," said Anil Dhanak, Managing Director of Kanz Jewels. "(For shoppers), it may be prudent to make some adjustments before we proceed further.
"This is particularly important unless the situation regarding the (Middle East) conflict escalates significantly."
Yet another day where the gold bulls head into the weekend feeling increased confidence in their position
But most resident shoppers planning their Diwali purchases were still caught off guard by the intensity of the latest increases. Those who did try to book their Diwali gold buys had to be content with Dh295/Dh297 a gram.
No one can guess what's next
"It’s hard to truly explain why the yellow metal is where it is, and we can all hazard a guess," said of Chris Weston, Head of Research at the consultancy Pepperstone. "This is a hot market, and while we may not see crypto-like volatility and range expansion (for gold), to many with a lower risk tolerance, that is absolutely why they are swimming in these golden waters."
Just show some price stability
Gold consumers all over the world have by now come to terms with the fact that prices are volatile on the upside. This year has already seen multiple new price highs – and instantly followed by a new one being set.
All that gold shoppers are hoping to see is some degree of price stability, even at higher levels
Nirav Bhansali is with India’s leading jewellery industry grouping GJEPC. He says all that shoppers are looking for is some price stability, even on the higher side. "In time, they will stop caring whether it's $2,500 or $2,700 - shoppers who are used to buying gold will keep doing so," said Bhansali.
"But for them to feel confident about buying, gold needs to show some stability. That's not happening now. Guess they will need to wait."
Come late October, when Dhanteras and Diwali are celebrated, UAE gold shoppers will deliver their answer.