UAE residents selling gold — should they wait for more price rises?

Dubai: Short of cash? Sell your gold.

Those UAE residents with a cash flow situation are back to making full use of their gold with Dubai gold price at around Dh375 a gram for 22K. (This is Dh8.75 away from the all-time peak local price.)

Since Friday, still small numbers of UAE residents – and some visitors to the country – are selling their gold, not for exchange but for straight out cash.

“We even had UAE residents going for their summer holidays cashing in,” said a gold retailer. “This was a surprise because usually most of such gold sales for cash happen when they actually reach their home countries. These shoppers were telling us they wanted the extra cash for local needs, and we saw this happen even on Monday (July 14).”

Get more 'cash'

Another reason for the cashing in is because these shoppers are looking to get more in their local currencies ahead of their summer trips. "Some of the sellers are heading straight to the nearby exchange houses to send off the money," said a retailer. (Dollar regaining strength has helped Asian expats in the UAE send more on their dirhams in recent days.)

Selling gold for cash rather than as exchange for new jewellery still remains a small part of the transactions at the Dubai Gold Souq and elsewhere. But in the last 5 years, there have been three or four occasions when gold prices had spiked and people needed that cash. (In the immediate period during the Covid year when there were job losses, residents and even small business owners used the gold they had to good purpose.)

This week, it’s the smaller gold and jewellery retailers who are seeing this flow of shoppers wanting to sell than buy.

For now, the gold buying season seems to be over after the latest spike in gold prices. Bullion is still at the $3,350 an ounce levels. (There have been sudden push higher to $3,375 levels before dropping back.)