Gold jewellery shoppers in Dubai. Image Credit: Gulf News archives

Dubai: UAE gold jewellery fans who are heading to the stores and hoping to score some bargains this long weekend shouldn’t keep their expectations high.

The value of the precious metal spiked on Thursday morning on the back of a weak US dollar, and it looks like the trend is set to continue.

Prices across the UAE jumped by Dh1.25 per gram in less than 24 hours, with the 24-karat (24K) now trading at Dh148.25 per gram. One analyst said that the price could breach the Dh150 level next week.

Yesterday, 24K stood at Dh147 per gram. With the latest increase, today’s shoppers could be paying Dh37.50 more on a 30-gram piece of jewellery.

Other gold pieces, such as 22K, 21K and 18K gold have also gotten pricier and they’re currently selling for Dh139.25, Dh133 and Dh114 per gram, respectively.

The American currency suffered a slump on Wednesday after hitting a two-week high as the markets reacted to the latest comments made by the US Federal Reserve chairman, Jerome Powell.

Powell had said that the benchmark interest rate is close to the neutral level, implying that the Fed could be making fewer interest rates.

“The dovish Fed stance was relatively constructive from pure dollar trade perspective and it could edge off the dollar and continue to do so until the year end, which is quite significant for gold prices,” Stephen Innes, APAC trading head at OANDA in Singapore, was quoted by Reuters as saying.

“The Fed chief’s latest remarks mean that there will not be a large number of interest rate hikes in 2019 and this is likely to weaken the US dollar. Let us not forget that [US President Donald] Trump also wants a weaker greenback,” added Vijay Valecha of Century Financial.

Valecha said he expects the price of 24K alone to touch Dh150.10 per dirham in the coming week. "The trade war between US and China and any decision from Fed to increase interest rates are factors that will affect any fall or rise in gold prices in the coming week," added Karim Merchant, Group CEO and managing director of Pure Gold Group.

Spot gold went up by 0.3 per cent to $1,224.13 per ounce by 8:10am. On Wednesday, the rates registered a 0.6 per cent increase, the biggest percentage gain recorded since November 16, according to Reuters.

“A weaker dollar helps other local currencies such as China and India get back in the game, which could add to gold’s lustre,” Innes added.

Gold prices had been on a decline over the past several months, encouraging many consumers to stock up on jewellery.

Jewellery demand across the globe rose by 6 per cent as of September this year, as lower prices caught consumers’ attention, according to the World Gold Council.

“Lower gold prices during July and August encouraged bargain hunting amongst price-sensitive consumers.”

The appetite for gold was very strong in India and China, where jewellery demand increased by 10 per cent. However, substantial declines were seen in some markets in the Middle East.