Dubai: Gold prices are coming under more pressure after dropping below $2,000 an ounce this week, and UAE gold retailers are rushing out with timed promotions to see if shoppers are ready for more purchases.
Since the start of the week, leading jewellery retailers have been in touch with their clients, talking about significant drops on their making charges. Some are offering up to 50 per cent cut on such charges, giving shoppers a straight forward rationale – buy on the price of gold. Or as close to it as possible.
This week’s bullion price drop to under $2,000 was the first since the start of the month. Even across April, gold had been robustly above $2,000 and on several occasions had looked primed to break the all-time high of $2,070 and even make a break for the $2,100 barrier.
International bullion prices slipped by a substantial $20 plus an ounce over-night earlier this week, and remains under pressure. It is currently at Dh1,980. (The UAE Gold Rate is currently Dh222 a gram for 22K and had seen a high of Dh228 in the last few days.)
So, today’s levels will be some relief for shoppers – provided they are in the mood to buy. Many of them would be hoping that more pressure will pile onto the gold price and make them more accessible when they make their trips to their home countries. And where they would get a chance to sell in their home market and make a tidy profit margin on that.
High price of gold was cited as the main reason for jewellery sales to drop significantly in the UAE, India and other major consuming markets (except China) in the first three months of 2023. During the period, gold was averaging around $1,900 for the better part.
What brings on the current dip?
More economic uncertainties up in the US are again a reason, in particular that related to the protracted talks going on over that country’s debt ceiling. In the background, the Federal Reserve is expected to finally bring about a halt to the succession of interest rate hikes in June.
Gold prices are caught in the in-between space of whether the US/global economy can subdue inflation in time or slip into a full-fledged recession.
The traditional UAE gold shoppers, meanwhile, will not be bothering too much on those details. All they would want to see is whether the UAE Gold Rate has a chance to slip towards Dh200 a gram for 22K.