Dubai: Scores of buyers flocked to Dubai’s Gold Souq on Sunday with the hope of bagging a bargain following the fall of gold prices to reach $1,501.40 per troy ounce on Friday.

Retailers, such as Malabar Gold and Diamonds, Joyalukkas, Paul and Sons Jewellers, enjoyed strong sales on Saturday and Sunday, for items ranging from gold earrings to bracelets.

For them, Saturday saw what they described as a gold “rush” from buyers. For some, Saturday brought in the largest number of customers in weeks.

“As soon as they read that gold prices went down, they all came to buy,” said a salesman at Paul and Sons Jewellers, explaining the buying frenzy on Saturday.

He added that he expects to see more buyers from the Asian community in the coming days, as the harvest festivals are celebrated this week.

Meanwhile, Malabar Gold and Diamonds sold nine kilograms worth of gold on that day, according to a salesman. He expects that sales of gold will be up 25 per cent this year, compared to 2012.

“The price of gold is now Dh10 to 12 less,” said a salesman at Paul and Sons jewellers at Dubai’s Gold Souk.

Stalin Thomas, in-store manager of Joyalukkas, says that he has noticed more customers coming in during the last two to three weeks.

Retailers may be selling gold jewellery for less, but making charges seem to remain the same. “The price is still the same, and will not change for now,” said Thomas.

Thomas added that the price of gold on Sunday was Dh166 per gram, compared to Dh173 per gram on Friday morning.

Analysts have taken different standpoints on whether the drop in gold prices will continue in the long-term. Pradeep Unni, senior relationship manager at Richcomm Global Services, said the price of gold is likely to go down in the long-term, due to a number of factors, including the strengthening of the US dollar, and the improving European economies.

The news of Cyprus’ plan to sell gold reserve has triggered the speculation that other indebted Eurozone nations such as Italy and Portugal could come under pressure to put their bullion reserves. Portugal, Ireland, Italy, Greece and Spain, hold more than 3,230 metric tons (3,561 tons) of gold between them, worth nearly €125 billion at today’s prices.

However, analysts said massive selloff by central banks are unlikely, especially in the context of the looming inflation threat resulting from cheap money policy being pursued by these countries. “In the long term, we expect to see gold prices from $1,380 to $1,650 per ounce,” said Sajith Kumar, CEO and director at JRG International and IBMC group.

A rise in investments from retail investors, predominantly from China and India, will boost the rise in gold prices, Kumar said. He also expects central banks in these countries to buy gold to support their economies.

— Sarah Algethami is a trainee with Gulf News