Gold prices in Dubai surge by Dh7 for 22K

After enjoying a three-day decline in gold prices, shoppers in Dubai were startled to find a sharp jump of nearly Dh7 per gram early this morning. The sudden increase has shifted the gold market dynamics amidst an already fluid pricing environment, with the Dubai gold rate now at Dh374.75 for 22K gold and Dh404.65 for 24K gold as of 9.30 am.

Shoppers and gold retailers had anticipated the price to edge closer to Dh360 for 22K gold, given positive shifts in the global markets. However, the sudden hike emphasizes the volatility of gold prices, necessitating smarter purchasing strategies, particularly with the festive Indian holiday of Akshaya Trithiya just days away.

Why the Price Hike Impacted Shoppers and Retailers

The unexpected rise in gold prices has dampened the enthusiasm of many gold shoppers in the UAE, especially those planning to capitalize on the recent downward trend. Gold sellers were also banking on stable pricing to encourage purchases around Akshaya Trithiya, a festival celebrated on April 30, known as an auspicious occasion for buying gold.

For context, Akshaya Trithiya and other Indian festivals like Dhanteras and Diwali typically mark periods of high gold demand in the UAE. Promotions during events like the Dubai Shopping Festival further amplify this demand. Retailers, therefore, view these occasions as prime sales opportunities.

An FX analyst emphasized the unpredictable nature of the gold market. “These days, the way gold is moving, anything can change in 24 hours—even within a single day.”

Understanding Price Fluctuations in the Gold Market

While some gold buyers hold hope that the price correction will bring further declines, experts warn against expecting a full-fledged crash.

Anil Dhanak, Managing Director of Kanz Jewels, noted, “Gold prices would need to close below $3,280 an ounce for it to be categorized as a crash. What we are seeing instead is more of a price correction.”

Earlier this week, gold prices briefly touched $3,260 an ounce, only to rebound to $3,336 shortly after. Dhanak further explained that the market had reached highs of $3,500 an ounce in recent days, which was one of the factors behind the sudden surge.

Should Shoppers Lock in Prices Before Akshaya Trithiya?

Given the price volatility, many gold buyers are faced with a critical decision: whether to book and lock prices for their upcoming purchases. Booking allows buyers to secure the lower price, regardless of any increases before the date of purchase. However, this option comes with the stipulation that the purchase must be completed within a set timeframe, usually 30 days.

A shopper planning to buy gold bars for Akshaya Trithiya expressed their strategy. “I would say any price around Dh360 per gram would have been a good booking rate, but I’ll still proceed with my purchase plans, regardless of the current rate.”

Retail experts urge shoppers to stay informed about price trends and consider booking if there is even a slight dip in the gold price. This approach can mitigate the risk of further price surges leading up to the festival.

UAE’s Gold Market Remains Resilient Amid Fluctuations

Despite the current price fluctuations, the UAE’s gold market remains robust. The region’s affinity for gold, driven by both residents and tourists, ensures steady demand. This resilience is evident in retail expansions, such as Indian jeweler Arakkal Gold and Diamonds recently opening its largest showroom in Sharjah’s Safari Mall. The launch coincided with the release of 500 kilos of new gold designs.

Thanveer C.P., Chairman of Arakkal Gold and Diamonds, remarked, “The Sharjah shop is a reflection of our legacy and a celebration of our future. There is truly a future in gold—for shoppers and investors alike.”

What Shoppers Should Do Next

The next few days are key for UAE gold shoppers as Akshaya Trithiya approaches. Experts advise monitoring prices closely, staying updated on global market movements, and making informed decisions about purchases. Whether you book prices in advance or take a chance on a last-minute dip, adaptability is crucial.

For retailers, building trust by offering timely and accurate advice to customers will continue to drive foot traffic and sales, especially during high-demand periods.

Final Thoughts

The recent surge in Dubai gold prices, though surprising, highlights the dynamic nature of the global gold market. With festive occasions like Akshaya Trithiya in sight, shoppers and retailers alike are preparing for what comes next. By staying informed and proactive, buyers can still make the most of this golden opportunity.