Dubai gold rate 'too close' to all-time high for shoppers

Dubai: The Dubai gold rate is still close to its highest ever level of Dh381.75 for a gram of 22K, adding to shopper and retailer unease about whether it makes sense to be spending during next week’s Eid Al Adha promotions.

Today’s rate is Dh374.75 a gram for 22K and the 24K version is Dh404.75.

At 10am, it had softened to Dh373.75, while the 24K gram is Dh403.75.

According to gold trade sources, it’s ‘highly unlikely’ that gold will move back to Dh380 levels – “at best, shoppers should expect Dh365-Dh370 a gram levels,” said a bullion dealer. “Everything, of course, rests on what US President Trump says and how the US economy is doing.

“Gold price movements keep being unpredictable – two weeks ago, we were talking about Dh350 being a decent price level for shoppers.”

Over the last two days, shopper sentiments in Dubai Gold Souq were muted, including among tourists. “Close to Dh375 levels has taken the wind out of shoppers’ plans to buy gold,” said a gold jeweler. “We had been running gold jewellery exchange offers, but the response remains weak.”

Sources in the gold trade say upcoming Eid promotions will need to focus heavily on discounts on making charges to strike a chord with shoppers. Doing so would be one way to ease shopper concerns that current prices are 'inflated' and not the 'new normal'.

"No one in the jewellery business is currently expecting a major sales boost first week of June from Eid offers," said a source. "The price is seen as too much of a barrier. The one real 'offer' jewellers can make is through discounted making charges. That more often than not works well with shoppers."