UAE jewellery retailers had been saying that the price drops of the last 2 weeks would be temporary. They are now being proved right. Image Credit: Virendra Saklani/Gulf News

Dubai: The two-week phase of lower gold prices has come to an end as the Israel-Gaza crisis propelled bullion rates higher by $20 dollars an ounce early Monday (October 9). The UAE gold rate for 22K started at Dh207.50 per gram when the local market opened.

The dollar and dollar-linked commodities were expected to rise this week given the scale of the situation unfolding in Israel. Oil is up more than 4 per cent, and gold has been busy reclaiming some of the ground it had lost during these two weeks by slipping below $1,900 an ounce and then falling all the way to $1,813.

But UAE gold shoppers might have already bought enough in these two weeks to compensate for the price recovery. “Since Saturday we have been seeing well above-average shopper traffic at the stores and in Dubai’s Gold Souq,” said a jewellery retailer. “Shoppers, including tourist buyers, were keenly aware that the slightest change in geopolitics can sway gold prices. This last weekend they made sure they bought in advance before any price increases starting today.”

In the coming days, any rates under Dh210 a gram will still be deemed as favouring tourist shoppers.

How UAE gold rate fared in these 10 days

In the last 10 days, the local price for 22K has ranged between Dh209.75 (on September 29) to Dh204 (on October 6). Right now, the rate is Dh205.5.

As was reported earlier, a sizeable number of resident shoppers locked in their purchase price at Dh204-Dh207 levels, placing a 10 per cent down payment on the condition that they would buy in full by November 15.

“While no one saw the current crisis coming, shoppers are keenly aware that there is only a limited time before prices go up again,” said the retailer. “This Saturday, after the crisis erupted, we got some of the heaviest bookings of the year for the price lock-in scheme.”

November’s festival buying - In October

By the looks of it, UAE resident shoppers have bought or booked all of their gold and jewellery requirements for November’s Indian festivals of Diwali and Dhanteras.

The first week of October has in fact proved to be the second biggest buying phase for gold since February, when the UAE gold rate was around Dh203.

For jewellery retailers, it is clearly a case of the festival buying happening early. And now, they wait for the next phase of dropping gold prices…