Stock Gold souq Deira
Tourists are showing up in greater numbers since the last week - and with dollar strong and gold prices under pressure, buying now seems like an opportunity. Image Credit: Ahmed Ramzan/Gulf News

Dubai: UAE gold shoppers have got another window of opportunity with the local gold rate for 22K at Dh193.50 a gram, and within touching distance of the lowest for this year to date of Dh191.75 on July 21.

UAE jewellers have brought out booking-linked schemes, where shoppers can reserve their gold at today’s rate on paying a 10-15 per cent down payment. The actual buying can be done in a month – or in select cases, within two months. And there’s always protection against prices rises in between.

The gold bullion rate is at $1,697 an ounce early on Friday, down by $11. (Key US economic data is due later today, if that disappoints, expect some pick up in gold prices.)

“Gold prices have softened at the ideal time – when salaries are being credited and ahead of festival buying,” said a gold and jewellery retailer. “But as we have seen in these few weeks, gold prices keep dropping to around Dh191-Dh195 levels and then bounce back immediately.

“Booking is an option for those shoppers who feel gold rates could come down further – but they don’t want to risk a sudden increase. Gold shopping has to make adjustments at a time when the Buy Now Pay Later culture is prevalent among UAE shoppers.”

Last past Diwali

Malabar Gold & Diamonds is one of the retailers to have offered booking options, on a 10 per cent advance payment. "The offer will run until end October and will also include the Diwali phase," said Abdul Salam K. P., Vice-Chairman at the retailer. 

There's been too much of gold price movements in the recent, mostly on the higher side. We wanted to give shoppers a chance to lock in when gold prices are on the softer side.

- Abdul Salam K. P. - Vice Chairman, Malabar Gold & Diamonds

So, for two successive months, gold’s been hovering at around the year’s lowest point. This would encourage tourist buying too, and market sources say this was seen happening right through the last week. “If prices remain at these levels for the next fortnight, we can easily capture a higher share of the tourist dollar,” said a retailer. “Dollar’s strength and the softer gold prices are a boon for tourists.”

It's all because of a surging dollar
"Gold prices are in freefall and have tested the $1,700 level after another round of strong economic data suggests the Fed could deliver more rate increases.

"Gold is becoming a punching bag as surging US Treasury yields have rejuvenated the king dollar trade. It has just been bad news everywhere for gold.

"No reprieve in sight for gold until the move higher with global bond yields is over. If the US nonfarm payroll report impresses, gold could see momentum selling target the $1,650 region."


- Edward Moya, senior analyst at Oanda