In pictures: After a drastic drop in UAE gold prices, are UAE shoppers going into a weekend buying spree?

International gold prices dropped by another $10 to $1,864 an ounce, and possibly setting up hectic buying interest today and over the rest of the weekend in the UAE.

Since September 18, the bullion prices are down by around $70 on an ounce basis, and it’s all showing up in the UAE Gold Rate.

In the UAE, the first retail gold price for the day has been set at Dh209.25 a gram on 22K, down by more than Dh7 in recent days, in what jewellery retailers say are levels that UAE gold shoppers can be comfortable with.

With resident shoppers, ‘It would be more of exchanging the gold they have rather than buying new,” said a jeweller. “Frankly, no one would have been expecting such a steep decline from the $1,930 levels that were there just last week.”

In value terms, exchanging the old for new would represent the easiest option for shoppers this weekend.

All they need to keep in mind – if they are exchanging gold they bought 5 years ago, they would be benefiting to the tune of around $670 on an ounce basis. (And 1 ounce is 28 grams.)

Since Thursday (September 28) evening, tourist shoppers were already doing the math in their minds and making up a good part of the buying at Dubai Gold Souq and elsewhere.

Tourist buying represents the best potential scenario for gold retailers. There’s less of gold exchanges involved, with these shoppers preferring to buy new.

Tourist buying represents the best potential scenario for gold retailers. There’s less of gold exchanges involved, with these shoppers preferring to buy new.

Each time gold seemed headed for lower price levels – and staying there – global events have conspired to push them back to $1,900 and over. There is no guarantee, at least for now, that this will not happen again.

So, if UAE resident shoppers do have plans for a round or two of gold buys, they should be taking those decisions fast.

Chances are that jewellery retailers will bring forward their Diwali and Dhanteras promotions forward. If that happens, then the cost of buying new will come lower for shoppers now.

Or they can just call in to lock their prices at current levels, and buy closer to Diwali. If prices go up, they are protected.

If prices were to drop further, it would mean they only need to pay the lower rate.

If the last 3 years have shown anything, it’s that gold prices are kind of sticking to those elevated levels. Compared to the last 10 years, even anything above $1,800 an ounce would be on the higher side.

But with gold, there’s always a payoff. Plus, all the emotional aspects related to laying hands on a piece of finely crafted jewellery.

That moment can be priceless.

This weekend will show whether UAE gold shoppers are making those decisions with their hearts or cool calculations...