Dubai gold price eases after record high - More drops ahead?

Dubai: The Dubai Gold Rate has seen the first cooling off in the last 24 hours, at Dh369.75 from Dh372.75 for a gram of 22K. (The 24K too has slipped under Dh400, after breaching that level for the first time yesterday.)

The price drop was not a given. At various points yesterday, gold threatened to reach for higher levels. In between, it would also drop below key levels seen in the last two days.

"At no point yesterday did anyone have a clue as to where the gold price might settle at," said a jewellery retailer. "That so far today it's showing a Dh3 a gram drop should be seen as quite a big positive. We will be hoping that shoppers think that way today..."

It was October last that the Dubai gold price crossed Dh300 for the first time on a 22K gram.

While no one expects gold to 'crash' back to Dh300 levels any time soon, there is a consensus among jewellery retailers that any price of around Dh350 would be seen as accessible by shoppers.

"We have been getting a lot of requests for gold bars," said a retailer. "I think these are buyers who believe they need to keep investing whatever be the price. Probably, they see gold at $4,000 an ounce in the not too distant future.

"But what we need now - and especially closer to April 30's 'Akshaya Trithiya' - is for shoppers in the UAE to be buying jewellery pieces. The chances of them doing that are better if gold is around Dh350. Not so much when it's Dh370 range."

Shoppers are still divided whether it makes any sense to pre-book their next gold purchase, especially those looking at a buy for Akshaya Trithiya, the Indian festival where it's deemed auspicious to pick up new assets.

"Even when it comes to pre-booking, shoppers will still want to do that at what they see as the 'right price'," said a retailer. "Booking too close to a new Dubai gold rate high might not be what shoppers will do."