Gold Prices Dip Below $2,000: UAE Outlook
Gold shoppers in the UAE find themselves in a favorable position as prices dip below $2,000 an ounce for the first time in two months, potentially sparking increased demand in jewelry stores. The current price of gold stands at $1,992 per ounce, marking a significant drop of nearly $30 over the last 12 hours. Analysts and retailers anticipate further declines, with expectations of prices reaching as low as $1,950. This downward trend contrasts with gold's status as a safe haven, which had seen it maintain levels well above $2,000 since mid-December.
Shamlal Ahamed, Managing Director for International Operations at Malabar Gold & Diamonds, believes that corrections in gold prices were inevitable following a sharp rise in the dollar index. He anticipates a resurgence in shopper activity in the coming days, with many hoping for further price drops during this period.
The local gold rate in the UAE, tracking global bullion price movements, slipped by Dh1.25 to Dh223.5 per gram for 22K gold. This decline suggests that retail prices may soften further, especially with expectations of continued downward pressure on global gold prices.
Retailers are optimistic about increased demand, particularly in light of the approaching Valentine's Day. Despite the drop in prices, there is still anticipation for last-minute purchases for the occasion. Retailers believe that crossing the psychological barrier of $2,000 could prompt shoppers to consider buying gold jewelry after two months of high rates.
The presence of Indian tourists in the UAE, particularly for events such as the new temple opening in Abu Dhabi, presents an additional opportunity for gold retailers. Although the drop in gold prices may not directly correlate with the influx of visitors, it is expected to contribute to increased consumer spending and activity in other sectors. Anil Dhanak, Managing Director of Kanz Jewels, highlights the potential impact of visitor spending on local businesses, despite the absence of a direct influence on gold rates.
The anticipation of increased shopper activity is evident, with reports of busloads of Indian tourists arriving at popular gold shopping destinations like Dubai Gold Souq and Meena Bazaar. Many tourists are likely to purchase gold regardless of the price differentials compared to retail prices in India, making the current price drop particularly enticing.
In summary, the recent drop in gold prices below $2,000 per ounce presents an opportunity for UAE shoppers and tourists, potentially leading to increased demand in jewelry stores. Retailers are hopeful for a resurgence in shopper activity, especially with Valentine's Day purchases and the influx of Indian tourists into the country. Despite fluctuations in gold prices, the allure of gold shopping remains strong for many visitors to the UAE.
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By- Sahiba Suri
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