Dubai gold price falls Dh14 in 7 days - UAE shoppers can start hoping for more

Dubai: The Dubai gold price drop has now hit Dh14 in 7 days, with a gram of 22K at Dh369 and with a strong possibility of slipping further to around Dh365. But the real deal for shoppers will be when gold slips to under Dh360.

For the first-half of yesterday, the UAE gold market was operating on anticipation about a softening in prices once the US-EU trade deal was confirmed over the weekend. But, initially, gold prices were holding firm, but by evening, the mood had changed – rates were starting to drop.

One has to go back to July 10 for the last time gold price was under Dh369.

“From seeing the Dubai gold rate at Dh383 last week to Dh369, that’s a relief,” said a jewellery retailer in Dubai. “But for shoppers, the real relief will only come when the prices are around Dh350-Dh355.”

The general sentiment in Dubai’s Gold Souq is that gold needs to go back to what it was in late March, which was just before US President Trump announced the tariff shock on the world. It was the time when gold prices shot through past $3,000 an ounce and then rallied to $3,500 as it became the go to safe haven choice.  

“So, between April to now, all of gold’s price increases were a reaction to Trump tariffs and what it might do to the US and global economy,” said a bullion trader. “This is what needs to ease for shoppers to return.

“The hope in the Dubai Gold Souq is that by September at least most of the concerns around US tariffs will disappear and gold prices would go back to normalcy.”

September is when the new season starts in the UAE with the return of visitors/tourists. For the gold trade, there is the extra incentive of wedding related sales.

It was early April that bullion prices were under $3,000 an ounce. The current price is $3,318 after a $20 drop so far. For most of June and July, gold was above $3,300 and $3,400 plus levels, with the Israel-Iran crisis also weighing in.

Some analysts are not so sure that gold prices will lose all of the 'fat' it has accumulated since April 10 or so. They do have a good reason to be unsure.

"World's central banks have been buying over 1,000 tons of gold annually for three years now," said an analyst at the trading platform IG. "Not for yield, but for long-term security.

"It’s a slow but steady shift away from the dollar, and it’s obviously reshaping how global reserves are built. At the same time, ETF (Exchange Traded Fund) flows are starting to come back. That’s a sign that passive capital is warming up again, looking for protection in a market that feels overstretched."