Dubai gold price rises nearly Dh20 in 20 days - should shoppers wait?
Gold prices cross $3,350 briefly in early trading - can this spike last?
Dubai: Gold prices shot past $3,050 an ounce for the first time in early trading today, and with shoppers and jewellery retailers wondering when will this increase start to stabilize. Or better still, actually see prices dropping.
When it comes to the Dubai gold rate, it's up nearly Dh20 a gram in just 20 days . Such increases have never been seen before, say UAE gold jewellers.
"The Dh319.5 for a gram of 22K on February 28 was the lowest the Dubai gold rate has been between February 19 and March 20," said a jewellery retailer. "Such gains of nearly Dh20 in the past would have taken months at the very least - now, it's happening in a matter of days." (The price of 22K gram in India is Rs8,291. One dirham is around Rs23.59.)
These days, tourists, especially those from India, are showing up at UAE jewellery outlets, to see whether they can get some good deals before their return.
How high can gold go from here?
As for gold buyers in the UAE, they are getting one message - prices are more than likely to edge higher in the coming weeks. Gold analysts say that a price of $3,300 seems reachable based on price trends this year.
But the most important message for shoppers is that whatever gold they are having right now has gone through a big price appreciation.
Jewellery demand tends to be more price-sensitive, and when prices are high, consumers purchase lighter products
"Sixty per cent of gold demand in the region (Gulf and Middle East) is for jewellery," said Andrew Naylor, Head of Middle East and Public Policy at World Gold Council.
"Jewellery demand tends to be more price-sensitive, and when prices are high, consumers purchase lighter products.
"However, our data shows that value of jewellery bought last year increased despite lower volumes, reflecting gold's long-term appeal as both an adornment and an investment."
There is still hope that at some point in the coming days gold prices will stabilize, even drop, as institutional investors book profits. Even then, there needs to be a real easing in global tensions for prices to retreat further.
That, by the looks of it, might not be happening any time soon.
