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Getting slightly more within reach... Gold prices remain under pressure, and shoppers will be watching. Image Credit: Gulf News Archive

Dubai: Gold prices in the UAE have dropped to their lowest levels since July 2020, with shoppers likely to make full use of it this weekend.

The Dubai Gold Rate opened today (February 18) at Dh203 a gram for 22K, as international prices of the metal remain under pressure. Bullion dropped below $1,800 an ounce in recent days and is now at $1,783 (10.23am UAE time).

“It’s too early for the price drop to start reflecting on UAE consumer demand, but we are hearing a lot of talk from among likely customers that prices are turning favourable,” said Cyriac Varghese, General Manager at Sky Jewellery. “All gold retailers will be hoping this shows in actual sales during the next two days.”

In recent weeks, demand has been steady, though with lower volume of purchases.

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Down to Dh200… or less?

Shoppers may yet take a wait-and-watch approach, on expectations that gold prices will slip to Dh200 a gram and further.

The last time gold prices were deemed as being truly shopper-friendly was on January 1, 2020, when the local rate was at Dh172 a gram.

By August, gold had touched an all-time high of Dh235 a gram, and which led to demand caving in to record lows during the third quarter.

Bring on promotions

If gold rates come under further pressure, retailers are likely to relaunch short-term promotions and convince shoppers to spend more.

Plus, a sizeable number of residents are unlikely to have travel plans this summer, and retailers see some of that travel-related expenses being diverted to gold now.

Or if it slips further…