STOCK Dubai gold shopping
The last nine days have not been kind to gold shoppers, as prices go in for a sudden increase. (Image used for illustrative purposes.) Image Credit: Gulf News Archive

Dubai: Buying gold and jewellery is turning out to be even more expensive suddenly as the Dubai Gold Rate puts on a near Dh5 a gram in just nine days. The price of 22K early Friday is Dh210 a gram, as international bullion prices hover at $1,841 an ounce.

Only once in the last six months has gold seen such a surge. The previous one was between November 10 to November 21, when the price had shot up to $1,866. “Resident shoppers have been delaying their purchases since the time the Dubai Gold Rate was at Dh205 plus levels,” said a jewellery retailer. “At Dh210 a gram, even tourists will have a serious rethink about spending on gold.”

While gold has been stuck at well over $1,780 levels for the best part of two years, shoppers in the UAE have generally been resistant to spending when gold is in the $1,810 and over range. “We have not been seeing any of the value purchases – of simple gold chains and bangles – for some time now,” said the retailer. “It was the tourist spending from October that kept driving the gold market, with UAE shoppers helping out with some heavy purchases early November because of Diwali.

“We remain hopeful that gold will slip to $1,800 and even lower once the world gets a full grip on Omicron and economies get back to growth.”

A dip by March?

Shoppers could be better off waiting until March, which is when the US Federal Reserve will announce its first interest rate hike of the year and then follow it up with two more. Higher interest rates mean less need for global investors to pump in funds into stocking up on gold.

“Mid-March could be when some sharp declines in gold prices could happen,” said a commodities analyst. “Until then, gold could keep seeing some sharp volatility on the higher side.”