Trump takeover is not cooling off gold prices, up to near $2,730

Dubai: Donald Trump assuming the US presidency is offering no respite for gold shoppers.

In fact, the asset has shot up by nearly $20 to $2,727 an ounce in early trades today and just hours after the change of guard in the US.

Many shoppers and jewellery retailers in the UAE had been hoping for some cooling off from levels of $2,680/$2,790 levels in recent days after the Trump takeover. At least today, they are not getting any of that.

The UAE gold rate is at Dh305.75 a gram for 22K, more than Dh10 higher than the price on January 1.

The question is whether gold prices continue to stick to today’s elevated levels, or even go higher. “There are a few wedding related purchases we had had been hoping to settle in the coming days from Indian visitors to the UAE,” said the owner of a jewellery store chain. “They had a certain fixed spend in mind, but the latest gold price spike will upset their plans.”

Other shoppers who had traveled down to the UAE for some gold buying too are disappointed. "Between paying for the still high hotel rates, flight tickets and other expenses, the latest gold price hike has upset our plans," said a visitor. "We wanted to buy a certain gram of gold during this trip, but that's not going to happen unless prices drop in the next 3 days."

Back to guessing game on gold

Shoppers and jewelers are back to guessing when gold prices would drop again - and if it does that, how much.

The problem for shoppers is that they need time to assess whether they are buying gold at the right time or not. "If someone sees today's price and compare to where gold was 30 days ago, there is a near $100 difference," said an analyst. "Looking at that, they would rather wait for gold to cool off somewhat.

"Very few shoppers are thinking they will buy at today's price expecting that gold will shoot up another $100 in the next 30 days. That's not how gold buyers are wired."

For the record, the highest point gold has ever been is $2,790 an ounce in October last.

More to follow...