More UAE investors turn to digital gold as Dubai price sticks to Dh375.5

Dubai: UAE investors keep piling into gold – whether as bars or coins but mostly in ‘digital’ gold – as prices remain above $3,350 an ounce. In the last 48 hours, online trading platforms have been seeing significant pick up in investors wanting to buy ‘fractional’ shares in the asset.

Investors are getting on in the belief that gold will push back to $3,400 levels in the near-term.

It comes as local jewellery sales endures another tough week, with the Dubai gold price at Dh375.5 for a gram of 22K. There had been some hope that gold prices will soften as soon as US President Trump confirmed there would be no tariffs on the metal. But after a slight decline, gold remains stuck at elevated levels.

Jewellery retailers say that only a clear price drop will revive shopper demand. “Even with more tourists returning to the UAE from September, prices above Dh370 will cramp sales of jewellery,” said a retailer. “The UAE gold consumer business cannot be boosted by demand for gold bars or coins alone.”

Yet, more UAE investors are opting to invest in gold in any means possible. “Even with the rise in US stock prices to record levels, gold investments are seen as the cushion if there is a sudden drop in stock markets,” said an analyst with one of the trading platforms. “Some investors are even putting in a 50:50 split between stocks and gold.”

Some investors had taken profits after gold reached $3,400 levels late last week after it was revealed the US tariffs on Switzerland will impact 1-kilo gold bars too.

"Investors who had bought gold at $$3,100-$3,200 levels made some decent profits last week," said an analyst. "Right now, many are returning to gold because US stocks are way too over-priced."

More will be known whether the US-Russia talks in Alaska will lead to a ceasefire on the Ukraine front. It was since February 2022 that gold prices started its surge and which eventually led to it hitting $3,500 an ounce for the first time just weeks back.

If a deal is struck, bullion traders are hopeful it will reflect in some price drop for gold. But even that’s not certain – because there is still the matter of US inflation levels and whether the Federal Reserve will cut rates in September.

Until there is clarity, “Gold has been a clear beneficiary, supported by a softer dollar, investor hedging against the twin forces of possible monetary easing and lingering price pressures, and the unwinding of last week’s Swiss gold tariff headlines,” said Ahmed Assiri, Market Strategist at Pepperstone.  

“The metal has reclaimed its 50-day moving average, an area previously flagged as a key positioning zone.”