Dubai gold price starts lower - but can shoppers see it drop to under Dh360?

Dubai: The Dubai Gold Rate has started the week at Dh367 a gram for 22K as shopper expectations rise about a full-scale softening in prices in the coming days.

But gold price movements have proved disappointing for jewellery buyers in the last two weeks with global prices rising by $130 an ounce in the last 30 days alone. (And in the last 180 days by a scarcely believable $758 an ounce…)

Compared to last Friday (May 9), the Dubai gold rate has already dropped a bit, from Dh371.25 to Dh367. But shoppers had been setting their eyes on the local prices softening to Dh350-Dh360 levels before they pick up some more gold jewellery ahead of their annual summer holidays.  

“Buy at every dip is what UAE shoppers have been doing in the last,” said Chandu Siroya, Managing Director at Siroya Jewellers and board member of the Dubai Gold & Jewellery Group.

“What we are seeing are short-term corrections, but gold prices ultimately have a way of heading higher (eventually).”

For shoppers, if future price spikes can be delayed as long as possible, the better off they are.

Last week's new gold high

In fact, last week there was a day when the 22K was at Dh381.75, a new daily high. "From those levels, today's Dh367 seems like a good correction for shoppers," said a gold retailer. "But there is also some price fatigue that's been set in by the high prices of the last two months.

"I think it will require a bigger price drop to get shoppers really interested. If the price drops under Dh360, that would be a good level ahead for buying before the holiday breaks."

The mood of optimism has lots to do with what's happening at the US-China tariff lowering talks in Switzerland. The feedback coming out is uniformly positive, and that's the main reason why gold is trending lower.

Bullion prices have dropped by nearly $70 to $3,271 an ounce - and possibly looking good for more dips.