Should UAE gold shoppers wait for possible price drop after January 20?
Wed Jan 15 2025
When it comes to gold buying, UAE’s resident shoppers seem to be in a wait-and-watch mood. They do have valid reasons to believe that gold prices could be in for a bit of a dip. For now, gold is still sticking to intensely high levels, currently at $2,676 and ounce after going up by $16 this morning.
The UAE gold rate is at Dh300 a gram for 22K after closing at 298.5 yesterday. So far this year, the highest local rate for 22K has been Dh301.75 a gram on January 12. (The year started with the UAE rate of Dh294.5.)
DSF gold raffles
“Gold prices have been moving in a tight range on the higher side, which has slowed demand,” said a jewellery retailer. “The only bursts of activity that’s happening are gold shoppers wanting to try some of their luck during the DSF 2025 raffle draws. Again, these are relatively smaller value purchases.
“But the hope among shoppers and us gold retailers are that prices could change soon. Hopefully, end up lower, around $2,600 or even further down.”
That’s the reason why many are waiting to see what happens next week, when Donald Trump takes over as the President of the US once again. It’s not just stock market investors who are bracing for action, even those who track gold believe changes to current price levels are a possibility.
“Trump formally taking over the US Presidency should bring some normalcy to the market,” said Shamlal Ahmed, Managing Director for International Operations at Malabar Gold & Diamonds. “Even now, gold’s price levels are substantially lower than the previous highs we have seen in recent months. And the tourist flows are still going strong.”
Ahmed’s right about the price comparison. Looking back at October gold prices, they were at their highest ever of $2,790 an ounce and it looked a sure shot that it would go on to break $2,800 and even run all the way to $2,900.
That didn’t happen, and after the December 5 election that saw the return of Trump, gold actually took quite a dip to $2,594 on December 19 from $2,624 on December 5, when the election result was announced. (In between, on December 11, it had hit $2,720.)
During DSF, leading jewellery retailers kept the focus on lower making charges to soften shopper concerns that gold prices are probably too high at this point. Kalyan Jewellers had run a promotion offering making charges at under 2%, and it’s a point that retailers are making again and again - that the ‘real’ price of buying gold in the UAE is lower than anywhere else.
Market analysts say that rather than expect a sustained price drop, shoppers should buy when there is a sudden dip. “If that price is comfortable for them, that’s when they should seriously consider shopping,” said a gold retailer.
“In the last 4-5 years, gold prices have gone down for a possible 3-5 days and then bounced higher. In the past, it used to be weeks before significant price changes happened. Not any more.”
In this regard, if in the coming days there is some easing of the situation in Gaza and Ukraine, expect some of that to reflect on commodity prices, including on gold.
“There are limited-time windows of opportunity for gold buyers,” said the analyst. “That’s what they should be waiting for. “A lot of shoppers could be pleasantly surprised by a cooling off once Trump assumes power.”
In a few days, shoppers will know whether that’s the case…
Source: https://gulfnews.com/