Gold back strongly in favour with UAE shoppers

      Published on Sunday, 27 October , 2019      145 Views     
Gold back strongly in favour with UAE shoppers

  • Culture

Gold’s current high price levels are actually turning out to be a boost for demand among UAE’s shoppers, and taking jewellery retailers by surprise.



The sudden pick up in demand against all odds is not just that related to the usual buying ahead of Diwali, the Indian festival of lights, retailers say.

“Because the last two months — when gold reached six-year highs — were exceptionally tough for retailers,” said Joy Alukkas, Chairman of the network that carries his name. “And then to see shoppers coming back this month even though prices haven’t dropped all that much, that’s a surprise. The best Diwali gift ever.

“It could be that UAE gold shoppers now are adjusting to prices at or slightly above $1,500 an ounce. And because they want to do some buying before it gets any higher. All the bets are on gold getting pricier.”

They have every reason to worry about more price gains, with some bullion analysts reckoning that gold is well in line to breach $1,700 levels next year.

A situation quite likely if the world economy slips into a period of ultra-low growth … or even worse.

Which is why local gold shoppers are again picking up coins and bars alongside their traditional jewellery purchases — gold to them is the best “defensive” asset they can get their hands on right now.

Current prices are 21 per cent higher than during October 2018. (On September 24, gold was at $1,534 an ounce and the local 22K at Dh174 a gram. On October 1, it was at $1,460 and the lowest level in the past month.)

From sellers to buyers again

All through the last two months, many in the UAE were actually selling their gold holdings and making quite decent profits for themselves.

These were typically on 22K gold bought when it was at Dh120-Dh135 a gram levels and sold when the price had zoomed past Dh170.

“The UAE gold trade did see a sharp increase in consumers selling gold during September, because they had an excellent opportunity to cash in when bullion touched a six-year high,” said Shamlal Ahmed, Managing Director for International Operations at Malabar Gold and Diamonds. “But those shoppers are now making a return to buying — our internal records show that up to 60-70 per cent who sold earlier have since bought at one of our stores.

“It’s because gold seems to be the only asset that’s gaining these days — against last October’s $1,226 an ounce, it’s now at the $1,490 plus levels and could shoot up further. Compare that to stocks, property, currency — everything’s down.



“It’s also why we are now seeing an improvement in buying by tourists to the UAE for the first time this year. Gold at current prices are back in favour.”

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Category Culture | 2019/10/27 latest update at 1:31 AM
Source : Gulf News | Photocredit : Google
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