Dubai: There is no joy for UAE gold buyers, with the global trade war now pushing the local rate to Dh175.25 a gram on Monday morning. On July 1, it was Dh158.5 a gram. International gold prices were trading at the $1,545 an ounce level, quite removed from the under $1,400 levels that the metal was at just weeks ago.
“The question remains whether gold will test the $1,693 an ounce level, which was the highest level in 2013 and which was seen on January 2,” said Cyriac Varghese, General Manager at Sky Jewellery. “That day, Dubai gold rate was Dh190 a gram.
“And then you have the $1,791 and $1,929 levels in 2012 and 2011, the highest points in those two years.” (Incidentally, the $1,929 is the highest gold has touched... ever).
Local sources say with gold at these levels, and no signs of backing off, shoppers will be in no mood to head to jewellery shops. Chances are they are unlikely to see any reason change their minds... at least in the short-term. With the Indian rupee weakening further, and other south Asian currencies weak, UAE residents from these countries are more likely to send home remittances than their latest gold purchases. The rupee on Monday has slipped below 72 a dollar.
Blame it on trade tit-for-tat
Gold prices will remain volatile with the US and China seemingly in no mood to back off from an escalating dispute on trade. The latest escalation was brought on by China adding a further 5 per cent on US imports, and Trump responding in kind. So much so, the global commodity markets immediately discounted anything the US Federal Reserve chief, Jerome Powell, had to say about future interest rate cuts, etc.
For now, it’s all about trade wars and price rises for gold.