Dubai: The window of opportunity for UAE shoppers to buy gold is getting narrower - not by days but within hours. On Friday (September 2), the UAE gold rate started the day at Dh193.50 a gram for 22K and well in sight of the year’s lowest of Dh191.75 on July 21.
But shoppers who were hoping for the price to maintain through the weekend (when global commodity markets are closed) were left bitterly disappointed by yesterday’s close, when gold firmed up within an hour or two to Dh195. All of which happened in about two to three hours.
In bullion terms, the price rise is even more stark - from $1,697 an ounce levers, gold’s up to $1,712-$1,716 after the US reported better than expected job numbers. But that’s not how gold buyers in the UAE were seeing it.
“The increase might only be by over Dh1 a gram, but each time there is a sudden price increase, shoppers will decide to take a pause,” said a jewellery retailer in Dubai. “Our hopes of a busy late Friday round of buying and sizeable activity during the weekend has been dashed. Now only tourists will be buying at the elevated level.”
Not enough time
Even those retailers who had been banking on shoppers making bookings at Dh193.50 level of the morning will now have to wait. “No one expected an immediate price rise in the international bullion markets,” said the retailer. “Many of our regular shoppers would have come today or tomorrow, because the feeling was that gold prices would fall further.
“In fact, the prevailing sentiment was that gold could dip to $1,650-1,675/oz or Dh180-Dh185/g.”
Gold prices in yo-yo mode
In fact, analysts were thinking along the same lines, that dollar’s strength and more worries about interest rate hikes and global inflation would depress gold prices to $1,650 or thereabouts. And the feeling was that even if the US jobs data showed resilience, it would not be enough to overturn gold’s downward pull. That was not how it turned out to be on Friday…
What next for UAE shoppers?
Resident shoppers will wait, knowing that retailers will keep the booking options open when the price drops next. Many of these buyers will have a date in mind on their next likely big buy of gold - in and around October 22, which is when Indian festival of Diwali is marked. (This is one of the peak periods for gold purchases in the UAE, and also a period when tourist buying picks up nicely.) “Bookings means price lock-ins and that’s the best option when prices are fluctuating like this,” said a retailer. “Anything between Dh190-Dh199 a gram would be a good level given how gold prices have performed since March 2020.
“But shoppers have to make sure they book nice and early the moment they see a favourable rate - there’s no point in waiting a day or so.”
If anyone had any doubt, they only need to remember what happened on Friday evening…