Dubai gold price set to rise after another delay in US trade deals

Dubai: The Dubai gold price dropped below Dh370 for a brief period on Monday (July 7), and that seems to be the only respite shoppers are going to get - for now.

In fact, the local gold trade is expecting to see an increase by Dh1-Dh2 from Dh370 for a gram of 22K. “Gold needs to see a decisive drop below Dh370 for shoppers to get interested,” said a jewellery retailer. “The only serious buying we are seeing right now are the Dh1,000-Dh2,000 purchases that qualify a shopper to be part of the DSS gold raffles.

“Others are going back to waiting because there’s this sense that gold prices are inflated and will drop if a lot of things align globally.”

Today, that alignment of forces is not there.  

That’s because the all-important deadline for the US to cut trade deals with its leading partners has been postponed to early next month from July 9. So, the same levels of uncertainty that were there in recent weeks get an extension, and gold prices will behave accordingly.  

It’s already evident in bullion prices in the global markets early today, with the price shooting back to $3,330 plus levels on an ounce basis.

The Dubai gold and jewellery trade made a calculated move to drop the entry level for the DSS gold raffles to Dh1,000 from Dh1,500, which was the norm.

The idea was to get as many shoppers who prefer to make their investments in physical gold, but do so only within certain price limits.

To an extent the move has paid off, especially late last month when the local price was Dh365-Dh366.

With DSS continuing until end August, the gold trade's hope is that the small-ticket shoppers will still be up to try their luck in the raffle draws.

"For many shoppers, it's going to take a lot of time before they feel comfortable buying when it's Dh370 or more," said a jeweller. "We hope to speed that up with value-for-money promotions."