In Pictures: UAE shoppers are buying gold as price inches close to Dh200

Gold dropped slightly to Dh201.75 a gram early Friday in the UAE – and inching closer to that psychologically important Dh200 mark, from the shopper’s perspective. But will it?

This explains why UAE shoppers – and tourists in the country – were picking up gold and jewellery since December 1. The price that day was Dh202.50, and the drop below Dh203 was enough for UAE’s jewellery stores to ring up a 20-25 per cent higher sales than is standard for early December days in past years.

In the buying and business of gold, sentiments are driven by fine margins. A 50 fil a gram change can be decisive in swaying a decision to buy now – or wait longer.

“December 2 sales ended even higher for the UAE gold trade, because through the better part of the day, the Dubai Gold Rate was at Dh201.5,” said Abdul Salam K.P., Vice-Chairman of Malabar Gold & Diamonds and member of Dubai Gold & Jewellery Group. “It was later that there was a slight increase to Dh201.75.”

Those 50- and 25 fils a gram do matter. Most of the sales over the last two days were all-new purchases, which means that there were no exchanges of jewellery or gold bought in the past. Exchange schemes were used for 25-30 per cent of the December 1 and 2 sales, which is the average seen in the past as well.

The biggest break that UAE jewellery retailers are getting is the strong buying from tourists. “With them, a price in the Dh205-Dh210 a gram range will not stop them buying,” said a retailer. “Because they still get other benefits such as on currency when they take it back to the Subcontinent. This has been the best December start in many years.”

So, is gold back on the agenda for shoppers in the UAE? The first few days of December sure makes it seem that it so. A further drop to Dh200 a gram for Dubai Gold Rate will confirm that.