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?
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Even at Dh201.75, that’s still a vast improvement on the Dh221.25 that anyone buying on January 6 last had to spend on a gram. The latest Dubai Gold Rate is also a vast improvement on the November rates, when the price of a 22K gram was closer to Dh210.
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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.
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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.
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“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.”
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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.
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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.”
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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.
Image Credit: AFP
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