Can Dubai gold price drop back to Dh360 levels - even go lower?

Dubai: The Dubai gold rate could see a further Dh2-Dh3 cut from Dh369.25 a gram for 22K as bullion prices soften at the start of the new week. But there were enough sales happening over the Eid Al Adha weekend at the UAE’s gold souqs and jewellery stores in malls as shoppers tried to make whatever use they could of the offers available.

Soon, there will be promotions from the Dubai Summer Surprises, while other emirates will also have their own summer shopping promotions.

The belief in the trade is that if the Dubai gold rate drops to under Dh360 a gram, there could be a fresh burst of demand – from ‘shoppers’ who are using every price drop to turn into gold ‘investors’.

“Compared to previous Eid spending, the Dubai Gold Souq did not see as high a demand because of the Dh369 price,” said Anil Dhanak, Managing Director of Kanz Jewels. “There were a few Indian tourists, but not heavy spenders. Even buying from Saudi visitors was on the lower side this Eid.

“Again, you are seeing gold shoppers becoming ever more practical. They are waiting for the ‘right’ price. Or the ‘right price drop’.”

Yes, compared to what shoppers had been expecting at the end of last month, the Dh369 was on the higher side. Through the better part of last week, the Dubai gold rate was trading at Dh370-Dh378 levels before dropping to Dh369 just before the Eid weekend. In that regard, shoppers got a decent price break – but not the Dh355-Dh359 range that many were hoping for.

Which is why many potential shoppers might be waiting to see if there will be some more price drops in the coming days and weeks.

"Not every shopper in the UAE is thinking of investing in digital gold," said a gold analyst. "But there are more shoppers willing to invest in physical gold and not just keep buying jewellery when they feel the price is right.

"I think gold retailers should also be promoting investments in gold bars and coins as they do with jewellery collections. It's a fact that gold buying is not just made for occasion-specific reasons. That's the big change the UAE gold market's seeing these days."