GOLD SOUQ AHMED 1-1627568374767
In the past, changes to gold prices were only concerned about the state of the global economy, the US Federal Reserve’s policy, and the way inflation rates were performing. These days, trends in the gold market are just as likely to be decided by COVID-19 infection rates and vaccination charts.
191006 china golden week
In China, the world's biggest gold buying market, retail sales have been improving drastically. A lot of it is due to pent-up demand from last year. In the April to June phase, demand 8% higher than in Q2-2019 and 5% above the second quarter average for 2010-19, says WGC in its latest report. Gold will not be going out of fashion in China… Image Credit: Gulf News Archive
A saleswoman selects gold necklaces in a jewellery showroom in India
But in India, the second quarter gold demand was flattened by the second wave, as fresh lockdowns were imposed in all of the major cities to combat the pandemic. "The lockdown and store closures impacted wedding demand and – for a second consecutive year – Akshaya Tritiya festival demand," says the World Gold Council report. Image Credit: Reuters
GOLD bar
Amidst all that uncertainty for jewellery, bars and coins held steady. Consumers in the UAE too have joined in, eschewing jewellery and instead padding up their gold collections with these. Moreover, there is no VAT on gold bars. Image Credit: Gulf News Archive
gold coins, gold bars
According to WGC, global bar demand saw the strongest year-on-year growth (by 18%), while coin demand recorded a more modest increase (7%). Image Credit: Bloomberg
In the UAE, jewellery retailers will be pinning hopes on tourists finally making a return as and when flights resume from the Subcontinent and elsewhere. Stage 2 of the UAE's jewellery sector rebound will need those shoppers to get back. Image Credit: Reuters