Eid Al Adha gold sales: UAE shoppers get no price break

Dubai: It’s proving to be a tough start to the UAE’s Eid Al Adha gold sales promotions as the Dubai gold rate sticks to over Dh370 a gram for 22K since Monday (June 2). The only time it was under Dh360 was for a brief period at the start of the week, adding to the pressure that’s been there on local gold demand for some time now.

Right now, there doesn’t seem to be any indication of gold dropping from these Dh370 and over levels. Currently, the Dubai gold rate is at Dh374.5 a gram for 22K and Dh404.5 for the 24K version.

All the usual Eid-related promotions are in place, including limited-time discounts on jewellery making charges and straight price cuts on diamond jewellery. But it’s the Dh370 and over price tag for a gram that’s getting in the way of higher demand.

The impression among jewellery retailers is that a lot of the resident-shoppers might have already made their gold jewellery purchases at various times since the start of the year, when they felt prices were more in their favour. “So far this year, a favourable price range for Dubai gold would be anything close to or just over Dh350,” said a retailer. “At Dh360 plus levels, there is quite a lot of price resistance.”

Interestingly, in recent weeks, there has been quite a sharp rise in gold buying via commodity, stocks and crypto trading platforms. Even when gold’s been at Dh360-Dh370 levels, the surge in retail investors – especially younger ones - buying into gold is noticeable. The belief is that gold should keep pushing higher towards $3,400-$3,500 an ounce levels consistently in the coming months – and even make a clean break beyond that.

"We've certainly noted a considerable surge in interest among retail investors exploring gold exposure,” said Feras Jalbout, founder and CEO of the Baraka platform.

“It appears that with ongoing geopolitical developments and prevalent inflationary discussions, some investors might be considering gold as a potential store of value.

“Interestingly, this trend isn't limited to physical gold; we're also observing a growing exploration of gold ETFs (exchange traded funds) and ‘digital gold’ products, perhaps due to their perceived accessibility and liquidity.”

The reference to digital gold is telling. Younger investors feel the need to have gold in their portfolio, but not necessarily want to be holding on to the physical version of it. By investing in digital gold, they are essentially doing what investors do when they trade in stocks – have that certain percentage of gold under their names based on what they spent. And when necessary, they can sell the stake they hold – or buy more.