Dubai gold rate sticks to Dh360 - are shoppers better off delaying next buy?

Dubai: The Dubai Gold Rate is sticking to on or around the Dh360 a gram levels and which has been frustrating for shoppers. Shopper sentiment is that the current level is ‘inflated’ and that they are better off waiting longer to see which way gold prices are heading.

Current gold price is Dh360.25 for a 22K compared to the Dh361.5 on Monday. It’s only when shoppers look to the prices late last week that they do find any clear price benefits – the Dubai gold rate over the weekend was Dh371.

“Even after the Dh11.25 price drop between Sunday and today, shoppers don’t seem to be in the mood to shop for jewellery,” said a gold retailer. “Even tourist buying has come down.”

Jewellers have responded by offering gold exchange promotions, but it’s still too early to say whether these have succeeded.

But some gold retailers are unsure whether shoppers will respond to gold exchange offers at a time when they think gold is likely to drop further. "Exchanges work best when gold prices are pushing higher - not on the way down," said a retailer.

In other words, shoppers are better off being patient.

For many residents in the UAE, this is also the month for them to plan their summer holidays and book tickets, which would be their priorities.

“It would require another major drop by Dh10-Dh15 a gram to around Dh350 or even Dh345 levels to get some excitement from shoppers,” said a retailer.

It could also be that shoppers are waiting for further price cues by the end of this month before they decide it makes sense to buy now or wait.

Currently, in the metals market, gold is at $3,230 an ounce level, up just over $5 for the day so far. But it also means much of the $100 plus gains of the last 30 days have been nearly wiped out.

But will any of this convince shoppers? Or are they waiting for a further $100-$200 drop to $3,100 or under?