Is Dubai gold price going to hit a new record?

Dubai: Will Dubai gold price shoot back to Dh383.75 a gram for 22K? Or go even higher?

If either of these happen, it would still mean the Dubai gold rate is at its highest ever point as global bullion prices return to $3,400 plus levels for an ounce. Currently, the local rate is at a flat Dh380 a gram for 22K and Dh410.5 for 24K.

Industry sources say that everything points to more upward pressure on gold prices, extending through the first fortnight of September.

Even being near a new price high is hurting gold and jewellery sales during what UAE retailers say is a crucial weekend. “We were hoping for some demand to come in for the new Onam jewellery collections released in recent days,” said a retailer. “”This weekend and the extended weekend starting next Friday (September 5) were supposed to see higher shopper interest.

“Even if prices were at Dh365, we would have been hopeful. But if rates are going to stick to Dh380 or over, it’s going to get extra tough.”

There have been a handful of occasions this year when gold prices were in the Dh380-Dh383.75 range. Even during those times, it felt that it would hit and Dh384 and then have a good shot at going all the way to Dh390.

But something or the other would happen in the global bullion markets and would end up lowering Dubai retail prices below Dh380.

But this time, gold retailers and wholesalers are not so sure. The US Federal Reserve should announce an interest rate cut at its mid-September meeting, and that could potentially lead to further firming up for gold. That’s the worry for retailers – and shoppers.

“The mood in the UAE jewellery market is downbeat,” said a retailer. “If our Diwali and end-of-year collections fail, that’s going to be a huge dent to our finances. Many retailers are starting to think of how to address this peak gold price situation.”

Jewellery retailers in the UAE are also watching closely how their counterparts in China and India – the two biggest markets for gold - are faring. “There is need for new thinking among UAE jewelers,” said a market consultant. “They have to find new customers and probably come up with newer products.”