Gold's current price surge started April after US announced steep tariff hikes
Dubai: The Dubai gold price remains at Dh372 levels for a gram of 22K – but shoppers will be hoping for a fairly big drop in the coming days after the US finally struck a deal with one of its biggest trading partners on import tariffs.
In fact, the shopper expectations were for gold prices to start dropping immediately as this was one of the biggest deals the markets had been hoping for.
But the Dubai gold price has barely changed in the hours after the Us-EU deal was announced. And so, shoppers and gold retailers keep waiting.
It was after the US President Trump delivered the tariff shock in April that gold immediately shot higher, with bullion reaching $3,000 an ounce and then firming up all the way to $3,500 before settling around $3,350-$3,430 an ounce levels for the better part of June and July.
In Dubai gold price terms, “Shoppers will need to see the rate drop to Dh350 a gram,” said a gold retailer. “The last 3-4 months have been the toughest for the UAE gold trade, and no amount of promotions are convincing shoppers to buy regularly at Dh360-Dh370 levels.
“The gold prices have to go back to pre-April levels before things move in this market.”
In an ideal world, UAE’s gold trade wants to see a return to Dh300 a gram levels for 22K, which was last seen in October 2024.
"I have been saying this for a while - gold price is too inflated," said Anil Dhanak, Managing Director at Kanz Jewels. "It should be $2,800 an ounce not $3,330."
Some bullion watchers are not so sure about immediate price drops.
The US-EU trade deal 'may reduce demand for safe-haven assets', said Chintan Mehta, CEO of Abans Financial Services, in a note. But the 'weakening dollar helped gold regain ground.
"Additionally, investors are closely watching the upcoming US-China meetings, where Treasury Secretary Bessent is expected to negotiate trade terms - adding another layer of caution to market sentiment."
So, in other words, the US-EU deal on its own will not have much of a sway on gold as investors' favourite safe haven.
The US Federal Reserve is meeting this week, adding to the uncertainty on where gold prices could be headed next.
As for shoppers in the UAE, 'they are better off waiting', said the retailer. "If gold prices don't see any downward spiral even after August 1's US tariff deadline, they will need to wait some more."
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