Dubai: The official gold rate in Dubai has touched Dh200 a gram for the first time in nine years. Anyone buying gold now – few are – will also have to fork out an additional 5 per cent on that.
“Gold’s turning super-hot – for consumers and retailers,” said a trader. “At these levels, it’s only a sellers’ market. Anyone who has gold and needs instant cash will be selling.
“There’s no shopper out there willing to buy.”
This comes after gold prices shot up to $1,760 an ounce levels in early Monday trade on the global metals market.
A good time to sell
If gold maintains this trajectory and pushes closer to $1,780-$1,790 levels in the next few days, it could set off another round of selling activity by UAE residents. Earlier this month, many had sold their gold for cash, especially those expat Indians who wanted funds to fly back to the home country on repatriation flights.
Some jewellery retailers had been offering price-lock in programmes since early March, during which period local prices for 22K were averaging Dh172 a gram. It meant if prices shot up, they would still be paying the lower price. (They had to pay up 10 per cent for the booking.)
“Initially, the booking was to close on April 26 (which was this year’s ‘Akshaya Trithiya’ occasion), but we extended it to until May 15,” said Abdulsalam K.P., Executive Director at Malabar Gold & Diamonds. “Many of these buyers could consider selling in the coming days if current levels are maintained or go higher.
“There are clear gains for them.”
Retailer sources say they have no issues about handing out cash for these transactions. Typically, they would encourage the seller to exchange it for another piece of jewellery. “But these are exceptional circumstances – people need the security of having cash on hand,” said Cyriac Varghese, General Manager, Sky Jewellery.
“As for gold buying, it’s all slow right now. Whatever momentum happens is likely only after Eid.”
A Dh200 gram barrier
But even for those who pick up gold at any price, the current levels might convince them to hit a pause. Much depends on how bullion performs in the international markets. In recent weeks, there had been multiple times when analysts had speculated it touching $1,800 an ounce – but each time, gold went on to slip lower by a few dollars.