Dubai Gold Rate back to touching distance of highest level - shoppers stay away

Dubai: The Dubai Gold Rate is just Dh5 away from its highest point in the last 30 days – and also the highest ever as prices swelled ahead of the crucial meeting of the US Federal Reserve Wednesday. Currently, the Dubai rate is at Dh376.5 a gram for 22K – and Dh406.5 for 24K.

The highest single-day Dubai gold rate was the Dh381.5 on April 21.

To put matters more starkly, the difference between today’s Dubai Gold Rate and on April 7 is a whopping Dh45.50.  That’s the sort of price gap that will push shoppers to the sidelines. Most shoppers and jewellery retailers in the UAE certainly didn’t see this coming, after gold recorded a gradually softening in rates last week.

But everything has changed since Monday (May 5), with the Dubai gold rate pushing its way to Dh269.5 from Dh361.5 and now to Dh376.5.

“We were expecting some tourist groups to come to the Dubai Gold Souq yesterday afternoon – but they dropped those plans after prices shot up,” said a jeweler. “This volatility is what’s hurting the gold business these days.

“Who can convince any shopper they are coming in at the right time when the gold price gap in just 30 days is a staggering Dh45…”

The next 24-48 hours will be critical in deciding whether the Dubai gold rate will go past the Dh381.5 record. (For a brief period on April 21, it had even touched Dh388.)

Everything sort of rests on what the US Fed meeting Wednesday will end up with. Some direction on future US interest rate cuts- and instantly reflected in the UAE – could be the prompt for gold prices to soften.

In the global metals market, bullion is at $3,363 an ounce and at times has pushed past $3,370.