Buy at the dip – it’s a strategy that’s so familiar to stock market investors. Wait for a particular stock to drop to a level they are comfortable with and that’s the time to get in. And wait for the stock to climb again…
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This should be the attitude that UAE shoppers should take with their gold buys. And many have been doing just that.
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Wait for the Dubai Gold Rate to drop below Dh200 a gram for the first time since June of 2020? That’s exactly what they did as gold prices dropped below that mark. It’s now at Dh195.5 a gram for 22K.
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But will these levels be enough to generate sustained buying in the coming weeks? Jewellery retailers in Dubai say demand will be linked to how many residents are planning to make a trip to their home countries between end March and August.
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If they do have plans to fly out, picking up some gold and make use of favourable exchange rates in their own countries will be a priority.
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“Those currency differences and price of gold in those countries should be enough to cover the ticket prices and provide some additional cash to spare,” said one gold retailer. “Ticket rates too have dropped so low, and a few grams will be enough to cover it.”
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Or should UAE shoppers wait some more before heading to a gold store? Globally, gold prices are again shooting higher.
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After dropping below $1,690 an ounce level last week, prices are now back to $1,730 plus levels. Wider factors are at work here – passage of the new $1.9 trillion stimulus package in the US, recent strength shown by the dollar, etc. These will force investors to pile back into gold – and push its price higher.
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Much to the disadvantage of gold and jewellery shoppers in the UAE and elsewhere.
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UAE’s gold buyers will sharing those sentiments in full.
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Will Dubai Gold Rate go back to levels last seen in March? Local jewellery retailers say that the next big round of buying will happen if the Rate drops closer to Dh180 a gram.
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“When gold was its peak in August last year, the Dubai Gold Rate was at Dh230 plus,” said a retailer. “No one thought at the time that it would be dropping below Dh200 any time soon. But in March 2021, it did… and we can always hope it could slip some more.”
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Should they then wait out the current rise? Much like they did for the most parts of 2020 (except during the ‘Diwali’ phase in November last year and the final couple of weeks in December.
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