A shopper browses gold ornaments at a jewellery store in Petaling Jaya, Malaysia. More wealthy individuals are buying gold as a safe haven, according to experts. Image Credit: Bloomberg

Dubai: Gold jewellery prices in the UAE dropped significantly in just a couple of days despite reported high festive demand in some markets, particularly India.

The price of 24-karat gold slipped to Dh147.50 on Thursday morning, down by Dh2 from last Monday’s rate.

At the same time, UAE buyers can score cheaper rates when shopping for 22K, 21K and 18K gold pieces today, with their prices dropping to Dh138.75, Dh132.25 and Dh113.25 per gram, respectively.

The seasonal robust demand for yellow jewellery during the pre-Diwali celebrations has apparently failed to prop up prices, as other global economic factors weighed on the precious metal.

Gold jewellery prices as of 12 noon today, Thursday

“The price [of gold] has fallen in the last two days because of escalating trade war between the United States and China, which has strengthened the US dollar,” Karim Merchant, group CEO and managing director of Pure Gold Group, told Gulf News on Thursday.

“When the US dollar strengthens, the price of gold fails. Also, the mid-term elections in the US next week is also adding to the uncertainty of US policies going forward,” Merchant added.

Historically, demand for gold goes up towards the end of the year, particularly in India, where consumers find it auspicious to buy yellow jewellery for special occasions, including Diwali and weddings.

According to the World Gold Council’s latest Gold Demand Trends report, lower gold prices have seen retail investors snapping up bars and coins in the third quarter of 2018, while jewellery purchases in India, China and across Southeast Asia also increased.

Global investor demand for bars and coins went up 28 per cent year-on-year. In China alone, the world’s largest buyer of gold bars and coins, demand went up by 25 per cent to 861 tonnes.

When gold traded lower in July and August, consumers also trooped to the stores, with demand in India and China registering an increase of 10 per cent each. However, demand for jewellery in the Middle East dropped by 12 per cent.