The Dubai gold rate started the week at Dh367 per gram for 22K, as shoppers anticipated a further reduction in prices over the coming days.
However, recent movements in gold prices have been disappointing for jewelry buyers. Over the past 30 days, global gold prices have surged by $130 per ounce, and in the last 180 days, prices have skyrocketed by $758 per ounce.
Slight Dip in Gold Prices, but Shoppers Hope for Larger Drop
Compared to last Friday (May 9), the Dubai gold rate has dropped slightly from Dh371.25 to Dh367 per gram. Many shoppers, however, had hoped for prices to fall to the Dh350-Dh360 range before purchasing more gold jewelry ahead of their annual summer holidays.
“Buy at every dip” is the strategy that UAE shoppers have followed in recent weeks, said Chandu Siroya, Managing Director at Siroya Jewellers and a board member of the Dubai Gold & Jewellery Group. “What we are seeing are short-term corrections, but gold prices ultimately have a way of heading higher.”
For shoppers, the goal is to delay future price spikes for as long as possible to make the most of current price corrections.
New Highs Followed by Price Corrections
Just last week, the price of 22K gold hit a new high of Dh381.75 per gram. In comparison, today’s price of Dh367 represents a significant correction. A gold retailer noted, “From those levels, today’s Dh367 seems like a good correction for shoppers.” However, there is some fatigue in the market due to the high prices in the past two months.
“If the price drops under Dh360, that would be a good level for buying before the holiday breaks,” the retailer added, suggesting that a larger drop is necessary to attract more buyers.
US-China Trade Talks Influence Gold Prices
The optimism surrounding the ongoing US-China trade talks in Switzerland has played a significant role in the recent downturn in gold prices. Positive feedback from the negotiations has been a major driver, contributing to the nearly $70 drop in bullion prices, now at $3,271 per ounce. With this positive sentiment, further price dips could be on the horizon.
