gold souq shopping, dubai gold souq, jewellery shop,
Gold shopping has got costlier over the last 24 hours - will prices be heading even higher this week? Image Credit: Gulf News Archive

Dubai: Presenting a Valentine Day’s gift in gold or jewellery will not come cheap for UAE shoppers as the Dubai Gold Rate shoots up to Dh211.50 a gram for 22K over the weekend. The Russia-Ukraine tensions are at the heart of the run up in gold, reinforcing its status as a safe haven asset.

The Dh211.50 a gram is easily the year’s highest point, and unless tensions over Ukraine ease up in the next few days, gold prices will not have a respite. (The same dynamics are in play on oil prices.)

“There were a few shoppers who came in yesterday (February 13) not realizing the heavy upward pull on gold prices since Friday,” said a gold retailer. “Some of them bought less expensive jewellery than what they had planned on.”

Since February 11, the Dubai Gold Rate has seen a Dh3.5 spike to Dh211.5, while the international bullion price early Monday is at $1,854 an ounce and easily the highest point it has touched in the year to date.

The latest gold price increase comes as a rude jolt for shoppers and jewellery retailers, who had been expecting some sort of price stability before the much-anticipated drop in March. This has to do with the US starting to increase interest rates and which would be followed by other central banks And when interest rates start to rise, gold prices – it is forecast – will start to dip closer to $1,800 an ounce or even lower.

“that was the expectation – but now, global markets will want to see some easing in the Russia-Ukraine situation for gold to come down from its lofty levels,” said a retailer.

$42.20an ounce

How much gold prices have risen in the last 30 days

A sell mindset

Some consumers are again seeing ‘sell’ opportunities from the current gold rates. “There were a few enquiries late yesterday asking about our gold exchange or buying policies from some of our shoppers,” said another retailer. “I think they will wait to see if gold can get to $1,870-$1,880 levels before they actually consider selling some of their holdings.”

The last time there was a major rush among local gold-holding consumers to sell was in late November when gold briefly touched $1,866. And prior to that, there was a phase between May 15 to June 15 last year when gold was in the $1850-$1,907 range.

Some jewellery retailers are thinking the big picture. “Whether shoppers want to buy or sell gold now is immaterial,” said a retailer. “What matters is that everyone remains convinced that holding gold is the best way to beat inflation. Gold remains the ultimate store of value.”

On February 14, everyone gets that point. Except maybe, a few Valentine’s Day shoppers looking for a good deal.