Dubai Gold Rate is cheaper by nearly Dh11 in 24 hours - but shoppers are waiting for more

Dubai: The Dubai Gold Rate is down by a near Dh11 a gram after one of the biggest single-day drops in recent weeks – but shoppers in the UAE want to see more this happening before they return for their next purchase.

The local price for a gram of 22K is Dh367.75 after closing May 7 on Dh378.5 (and within touching distance of the highest ever level of Dh381.75 a gram, also reached this week).

The shopper sentiment is they will consider buying gold jewellery if gold keeps dropping to around Dh350-Dh355 a gram levels. “There is an impression that anything above Dh370 – and even Dh360 – is inflated and shoppers are reluctant to buy in at these levels,” said a gold retailer. “They only made an exception on April 30 because it was ‘Akshaya Trithiya’, when 22K was Dh369.”

But can gold drop further?

Going by emerging trends, there are signs favouring the Dubai Gold Rate at around Dh360 levels, and ‘with a good shot at even reaching down to Dh355’, according to the retailer. “But going back to Dh350 levels might be difficult.”

Incidentally, the lowest price point in the last 30 days was Dh351.25, which was on April 10.

The latest price drop should be enough to get tourists heading for the Gold Souq and jewellery outlets at malls and on the high-street. "Whatever tourist shopping we see is done through buying new gold jewellery," said Anil Dhanak, Managing Director at Kanz. "Out of every 10 purchases by a tourist, one or two would be through gold exchanges, at least that's what we see at out stores.

"As for UAE residents, they can wait and watch for the 'right' price, whenever that comes."

If so, will it take a further price drop to, say, around Dh360 to get them back in the game?

Or will that have to be Dh350 a gram for 22K?