Gold in the UAE: Time to buy? Prices continue to slip amid claims of Russia-Ukraine conflict de-escalation

Dubai: Gold prices dropped on Thursday, with futures - which are indicative of near-term prices - continuing to drop unusually more, giving hope to potential gold buyers in the UAE.

In the UAE, the cost of 24-karat gold was at Dh232.75 per gram on Thursday, down from Dh234.25 on Wednesday. Check the latest gold rates here. Meanwhile, the price of 22-karat gold fell to Dh218.50 per gram, 21-karat to Dh208.50 and 18-karat to Dh178.50 in the UAE.

Gold was in range-bound price trade on Thursday, but the safe-haven metal was set for its biggest quarterly gain since September 2020, as the Russia-Ukraine conflict lifted bullion's appeal.

Spot gold was down 0.6 per cent at $1,921.55 per ounce. US gold futures, which are most often indicative of how prices will move in the days to come, fell 0.7 per cent to $1,925.00. The metal has gained about 5 per cent so far in the quarter and 0.7 per cent in the month.

"Gold traders are balancing out with potential for further gains based on geopolitical risk and possibly inflation, and the dangerous outlook for gold holdings with rising interest rates and the net result has once again been that we've returned to the middle of the trading range," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.

Buy now or wait?

Due to the Russia-Ukraine conflict, the global supply of oil and gas is expected to go down with sanctions against Russia and oil prices consequently went up. The uncertainty also pushed some investors to buy gold and pushed up gold prices.

For any investor, holding gold makes a lot of sense when there is an expectation of sticky inflation and dollar strenght. Though this may play out globally for some time and gold may remain in demand, investors have to be measured in their action.

Though it’s common for new investors to compare asset classes and go for the one that has given the highest returns, experts say this is unwise. It is not stocks or gold, rather it is stocks and gold, along with other asset classes, that will help you invest better and make consistent returns.

Dubai-based commodity analysts opined how though gold prices may go up further and the best time to buy gold being six months ago, now, allocations to gold should be in line with asset allocation needs. Aggressively chasing gold for returns is best avoided, market experts add.

But just because gold prices have risen in the recent past, analysts add that it doesn't mean that one should not take that to mean prices will keep moving up. Commodity experts expect drop in gold prices after a rise over the last few weeks, which should act as a good entry point for investors and buyers.