Nothing like this has happened before, say jewellery retailers, and adding that it will take a lot of convincing for people to buy at these levels.
As for bullion prices, it was minutes ago that the $3,200/oz barrier was broken. In the process, it beat the earlier high of $3,171 – which was last evening UAE time.
This comes after fresh concerns take over global markets as the intensified US-China trade war adds to the overall uncertainty. The US stocks ended down yesterday, while Asian markets have opened in the deep red this morning.
Adding more uncertainty to the proceedings is a weakening of the dollar.
Add all that up and you have reasons for the gold to shine at levels never seen before.
‘Only gold bars’
“The only demand from UAE shoppers is for gold investment bars,” said Anil Dhanak, Managing Director of Kanz Jewels. “Jewellery sales are at extremely low levels, and UAE shoppers are not even willing to consider gold exchanges.
“They now feel they have a better chance of getting more if they hold. The way gold’s performing, what they say makes genuine sense.
“It won’t be enough for jewellery retailers to say that gold’s a safe haven asset, so keep buying.”
‘Find new ways’ to sell gold
Other jewellery industry sources also say they will have to rework their promotions to get a response from shoppers.
“Gold price has reached a level where even making charge cuts won’t be enough,” said one gold wholesaler. “Even zero making charges may not be enough.
“It will take a Dh20-Dh30 a gram price drop to make shoppers feel they are getting a price they are comfortable with.”
Even price difference will not be enough
Tourists shopping for gold too has had a steep drop in recent days, finding prices too high a barrier for entry.
“UAE gold price has a 6% price advantage over India, but which used to be 15% until mid-2024,” said a jeweller. (The current price of a gram of 22 gram in India is Rs8,259.)
“A shopper from Saudi Arabia gets the 5% VAT refund when buying in UAE compared to 15% in the Kingdom,” said the jeweller.
“Even then, you can feel that shoppers are collectively thinking of waiting this out.”
