Dubai gold price drops to lowest since June 1 - will DSS raffles' Dh500 cut trigger shoppers?

Dubai: The Dubai gold price has dropped to its lowest level since June 1. At Dh367.5 a gram for 22K, it is showing every indication of a further drop. The price was Dh370.25 last evening.

It will come in handy as the Dubai Summer Surprises opens – will the price drop convince UAE shoppers to try their luck on the gold raffle draws? Especially after the price of entry has been slashed to Dh1,000 from Dh1,500?

Shoppers will have to decide whether the many summer promotions from gold and jewellery retailers along with the raffle draws in Dubai for DSS are enough for them to try their hand. But cutting the DSS gold raffle entry price by Dh500 should work well, say retailers.

“Each DSF and DSS, there will be a pool of shoppers who buy gold whatever the price,” said a gold retailer. “The majority of these purchases will be around Dh1,500-Dh3,000, so that they get a chance to participate in the raffles. The raffles are always about helping a shopper who makes regular investments in gold during Dubai’s DSF and DSS promotions.

“This time, with the entry set at Dh1,000, we can expect the same shoppers coming back for the smaller purchases.”  

The best part is that the Dubai gold price has started the day lower, and some indications that it drop below Dh370 – the key price level that shoppers base their decision whether to buy now or later.

In the last 7 days, there has been only once that the local gold price dropped under Dh370. But going by trends so far, today could be that second day – and if it closes under Dh370, that will be the the price through the weekend too.

Yesterday's gold price increase came about after renewed doubts in global markets on the short-term future of the dollar. That saw the US currency dropping to a 3-year low - and when dollar drops, gold typically rises being the safe haven of choice.

Today, the dollar's weakening - again - but so is gold. "This is why the Dubai gold price is coming under pressure - and which is why there's a good chance shoppers will be seeing an under Dh370 a gram price for 22K this weekend," said a trader.

So far today, the bullion price is down by $30 plus on an ounce basis to $3,299, which is the lowest in nearly 30 days. On May 30, the price was $3,289.

"What's clear is that there is some shake up going in the global markets," said an analyst. "Gold's drop could be temporary, but the fact remains that it's looking like the price will go down further today."