Dubai: Gold prices made a dash to break the $1,800 an ounce mark once again, before dropping just a bit to $1,796 levels, which could hurt UAE shoppers’ plans to pick up some grams before heading for holidays to their home countries. Over the last 10 days, gold has gained more than $50 an ounce as dollar power declines over reducing concerns about US/global inflation.
In the UAE, the gold rate shot up by Dh4 in the last 24 hours. It is now at Dh203.75 a gram for 22K, and making decisive break from the under Dh200 that was the norm since mid-October.
Trends expected later today, when the US announces key data on job creation, could set the tone for the coming week, but more analysts are turning bullish about gold finding some staying power at $1,800 levels.
“The trend is for gold prices to firm up, but the speed at which gold shot through to $1,800 still comes as a surprise,” said a jewellery retailer. “Some of our shoppers are still going to buy, having made their booking and down payment when the UAE gold rate was Dh199 a gram for 22K.
“If gold pushes once more to Dh205-Dh210 levels again, the slight buying activity we are seeing now will drop.” (Today, the gold rate is at Dh203.75.)
"Anyone who booked last week when UAE gold rate was still under Dh200 and has plans to sell on their trip home can expect a decent bonanza," said the retailer. "There's talk of gold closing the year at $1,820-$1,850 levels.
Under Dh200 - a comfort zone
This last year has affirmed the trend of UAE shoppers going back to gold whenever prices drop under Dh200. And the sweet spot for them remains below Dh190 a gram. The lowest point this year was the Dh184 plus recorded late October. And that was also the period when gold sales in the UAE was at its highest point, as it also coincided with the Diwali buying.
A strong December?
"Gold prices catapulted above the $1,800 level as inflation cooled and on hopes that the Fed could soon be done tightening," said Edward Moya, Senior Market Analyst at Oanda. "Tactical traders continue to send the dollar lower and that is good news for bullion."
But no so good news for gold shoppers...
