UAE gold shoppers wait for price to drop below Dh370 - they could get it

Dubai: The Dubai gold price could drop to under Dh370 a gram for 22K for the first time in 20 days, coming as partial relief for shoppers in the UAE. It was on July 31 that gold was at Dh368.25 and the day before that was at Dh365.25.

In fact, at that time, there was much hope of prices slipping further to Dh360 levels – but nothing of that sort happened. All through the August, prices were sticking to high Dh370 plus levels.

But today, there are signs that some of gold’s upward momentum has reduced. And if that means a return to under Dh370, then it could perk up some interest in jewellery demand.

September heralds the start of the new season for the UAE, and for the gold trade it means a return of tourists as well as those initial sales enquiries for wedding-related jewellery sales.  

"We haven’t seen much buying for wedding season as yet," said Rohan Siroya, Director at Siroya Jewellers. "Some clients are browsing - but it remains to be a wait as they hope for rates to be better.

"The 2025 gold buying season in the UAE is expected to begin after 'Onam' in September." (Onam is the Indian festival celebrated by Keralites.)

But there are also shoppers who have seen gold prices soften at various times in recent years, only for their hopes/plans to be dashed.

“Gold prices have in recent months suggest that it could drop more – but each time, shoppers have ended up disappointed,” said a gold retailer. “UAE shoppers are not ready to spend on gold jewellery when it’s Dh370 plus. Our hope is that gold will go back to Dh360 if Russia-Ukraine crisis is resolved.”

In the global markets, gold is down to $3,317 an ounce, well down on the $3,345 from yesterday. And just in the last 30 days, gold is off by nearly $100 on an ounce basis.

Some of the softening can be traced to the US-led efforts to bring a halt to the Russia and Ukraine crisis, which has been on since February 24, 2022. That day, gold was just over $1,900 an ounce.

No one believes that a halt to the fighting between Russia and Ukraine will immediately see gold decline to $2,000 levels.

But even a drop to around $2,500-$2,700 would come across as a major boost for gold jewellery demand, which in the UAE has suffered declines for the last 2-3 years, mainly on account of high gold prices.

“Everyone talks about gold as a safe haven and hedge against inflation,” said a retailer. “But most jewellery buyers are not thinking along those lines. The way they see it, Dh340-Dh350 a gram for gold is still reasonable, but not Dh370.

“That’s the whole reason why gold jewellery sales dropped in the UAE. Shoppers are not buying even when retailers keep saying that Dh360-Dh370 is a ‘bargain’ and prices will go to Dh400 for 22K at some point in the future.”

Jewellery buyers are only interested in what they need to pay in the moment.