Stock Gold souq Deira
A 'recession' mention was enough to have gold prices shoot up - and forcing shoppers to think of postponing their next purchase. Image Credit: Ahmed Ramzan/Gulf News

Dubai: Gold prices are again turning too hot for UAE shoppers, with the Dubai Gold Rate crossing Dh200 a gram for 22K all over again today. Currently, it is at Dh200.50, and with gold prices now hitting $1,760 an ounce levels, local rates are all set to increase.

Gold has gained $40/oz since Wednesday evening, which was when the US Federal Reserve hiked interest rates by another 0.75 per cent. Since then, there has been renewed talk of a global recession happening, especially with the US economy contracting in the second quarter. And whenever there’s talk of recession, gold as a safe haven asset gets magnified.

“Shoppers in the UAE are going to stay well away from any more buying – especially when the Dubai Gold Rate has risen by about Dh10/g in about a week’s time,” said a jewellery retailer. “All those who bought this month when gold was under Dh195/g will be the beneficiaries.

“A Dh10/g difference might not seem much – but the latest increases will be a psychological blow for shoppers. I think it will take time for them to adjust to buying at Dh200 plus.”

For jewellery retailers, the two-day spike will not hurt much. Heavy buying through the better part of this month has provided them with the cushion they need. Also, many shoppers had brought forward their wedding/other needs purchases to make full use of gold dropping to Dh192 levels.