Investors are exiting gold as holdings in exchange-traded funds drop along with open interest for futures. Image Credit: Bloomberg

Dubai: Bargains were up for gold buyers in the UAE on Wednesday as local jewellery rates plunged to their lowest level in the wake of the interest rate increase by the US Federal Reserve.

However, prices could inch back up again anytime today, as high demand from investors have already pushed up international gold rates. Spot gold dropped to their lowest level in two weeks on Wednesday to $1,190.13 before edging higher to $1,196.21 an ounce Thursday morning.

Jewellery pieces across stores in the country were still cheaper by Dh17.25 per gram as of 8:49 am today, Thursday, compared to April 3. They also cost Dh1.25 less compared to a week ago, according to figures provided by Dubai Gold and Jewellery Group.

The price of 24K stood at Dh144.75 per gram compared to Dh145.25 early Wednesday and Dh162 per gram last April 3.

That means early buyers could save nearly Dh250 when buying a 14-gram 24K gold chain compared to April 2018’s peak price, or Dh17.50 compared to the prices seven days earlier.

Gold prices in UAE as of Thursday, 8:49am:

Gold prices in UAE last April 3:

The US Federal Reserve raised the benchmark rate by 0.25 per cent, to a range of 2 per cent to 2.25 per cent on Wednesday. The precious metal usually falls in value when the Fed adjusts the rates, as they tend to invigorate the US dollar.

However, it’s only a matter of time before local jewellery rates will go back up again. With the precious metal attracting bargain hunters, high demand could push prices back up again .

On Wednesday, spot gold dropped to $1,190.13, the lowest price in two weeks. However, as of early Thursday, rates edged up to $1,196.21, according to a Reuters report.