Stock Dubai gold shopping Covid
Selling their gold is what UAE residents have been doing in recent days with gold well past the Dh220 a gram mark. Image Credit: Virendra Saklani/Gulf News

Dubai: UAE’s gold and jewellery stores are experiencing a rush of activity, with consumers wanting to sell part of their gold assets and make a tidy cash profit. The heavy selling – by consumers – started last Friday (March 4) as gold prices shot towards – and past – the $1,950 an ounce mark. The Dubai Gold Rate is at Dh226.75 a gram.

“It wasn’t just those residents from India, Pakistan or Egypt (traditional gold buyers) who are selling now – everyone who has gold to spare has been joining in,” said a top official with one of the biggest jewellery store chains in the country. “The Dubai Gold Rate going over Dh220 a gram seems to have been the trigger this time.

“We expect a lot more of profit-taking on gold to happen at the shopper level. They seem to think this is a great opportunity – and they are right.”

If they are selling some of their jewellery, UAE’s consumers will lose out on the 3-4 per cent that went in as making charges. For the actual gold weight, they make a direct profit.

Gold was at $1,827 an ounce on January 1, 2022. 

Profit motive
Not trading up.

These days, UAE residents - and tourists too - prefer to cash out on their gold holdings rather than make a new purchase.

"This is all about making a profit today from gold," said a retailer. "That's the sentiment."

Buying a new jewellery set can wait.

Just a few dirhams away

The all-time high for the Dubai Gold Rate was the Dh235 a gram for 22K in early August of 2020. On Tuesday morning, the Rate is at Dh226.75, with the international price around $1,991 an ounce. (In the last 12 months, international prices are up $283 on an ounce basis.)

A difference in the selling

This is the second time that UAE residents have resorted to heavy selling rather than buying more of the metal. In July and August of 2020, many did sell some of their gold holdings as they sought to come to terms with the COVID-19 outbreak and what that did to income or job situation.

“That selling was characterised by fear, by concerns over what the future had in store,” said a jewellery retailer. “This time, UAE consumers are sure why they want to sell – earn a solid profit on their gold. Some of the gold being brought looks as if they were bought at Dh150/Dh160 a gram levels.”