UAE jewellery retailers had been worried that gold demand during this year’s Akshaya Trithiya could be in for a sharp drop over high prices. But it’s not shaping up like that as shoppers make use of the recent price softening. Image Credit: Virendra Saklani/Gulf News

Dubai: Ahead of tomorrow’s (May 10) ‘Akshaya Trithiya’ festival, UAE shoppers have been making heavy advance bookings to lock in their gold purchase price. And they are getting a favourable break on prices.

Bullion prices remain under some pressure, currently trading at $2,312 an ounce and down from $2,320. Shoppers and jewellery retailers had been concerned at the start of the week that gold could push its way to $2,340-$2,350 levels and add further pressure on shoppers’ plans for Akshaya Trithiya – and one of the busiest days in the UAE retail calendar for gold buys.

“If a typical day sees UAE gold sales of 250 kilos, then on Akshaya Trithiya, that number shoots up by four times and even more,” said Shamlal Ahmed, Managing Director for International Operations at Malabar Gold & Diamonds.

“Advance bookings for May 10 purchases have been heavy, and we have already reached 60-70 per cent of our target. It’s actually been a surprise because gold had remained at over $2,300 and well over for most of the last 3 weeks.

“But we are seeing UAE shoppers are not ready to break their habit when it comes to gold buying on Akshaya Trithiya.”

If a typical day sees UAE gold sales of 250 kilos, then on Akshaya Trithiya, that number shoots up by four times and even more.

- Shamlal Ahmed of Malabar Gold & Diamonds

How’s the UAE gold rate faring?

Currently, the local gold price for 22K is at Dh259 a gram. (In the last 10 days, this has ranged between Dh258-Dh260 compared with prices of well over Dh260 through most of April.)

The highest ever point to date for 22K UAE gold rate was Dh269.5 on April 12.

From those levels, anything under Dh260 seems inviting, which too could explain the bookings ahead of Akshaya Trithiya.

The fundamental drivers supporting gold are likely to sustain its upward trajectory long term.

- Anil Dhanak of Kanz Jewels

“Yes, bookings show a promising trend, ranging from traditional buyers to tourists seeking unique purchases,” said Anil Dhanak, Managing Director of Kanz Jewels. “This blend underscores the enduring cultural and economic significance of gold in various communities.

“My long-term view remains bullish on gold. Despite short-term fluctuations, I believe that underlying economic and geopolitical uncertainties - coupled with inflationary pressures - will continue to support demand for gold as a hedge against currency devaluation and market volatility.”

If that happens, bullion traders and analysts will once again start talking about gold at $2,500. Even higher.

But shoppers aren’t thinking that far ahead – all they need to know is what they can get and at what price for Akshaya Trithiya.

By that yardstick, gold movements in the last 30 days – down by $26.54 on an ounce basis - offer them a glimmer. And they are willing to cash in on May 10.