In a significant turn of events that’s impacting Eid shopping plans, gold prices have surged to a new all-time high, crossing the $2,232 mark per ounce. This spike in prices is casting a shadow over the enthusiasm of shoppers in the UAE looking to purchase jewellery for the upcoming Eid festivities. As of 7 am, gold was trading at $2,233.75 in the metals market, following a more than $41 per cent rise in recent hours.
This isn’t the first time this year that gold prices have soared past the $2,200 threshold. On March 21, gold prices initially crossed this mark, peaking at $2,223, only to retreat slightly to just under $2,200 in the subsequent days. However, the current rate of gold for 22K in the UAE stands at Dh247.25 a gram, adding to the woes of potential buyers.
A local gold retailer expressed concern over the impact of soaring prices on the Eid shopping surge. “For the UAE jewellery market to see an increase in Eid-related demand, gold prices need a significant correction. It’s challenging for shoppers to justify purchases when the asset is trading near all-time highs,” the retailer mentioned. They also noted that while some demand might still emerge in the final week of Ramadan and for Eid, it’s likely to be focused on lower gram jewellery or coins, with the hope that Gulf visitors might still make substantial purchases.
Market analysts believe that the upward trend in gold pricing since the start of the year has been robust, with only brief and minor dips. They anticipate that this cycle could propel prices to the $2,250-$2,300 range. However, a drop in prices might occur if investors engage in profit-taking, creating a potential buying opportunity for shoppers.
Vijay Valecha, Chief Investment Officer at Century Financial, observed, “There has been considerable profit-taking by institutional investors and funds holding gold, which is why the price rise has been relatively slower.” Nonetheless, with UAE gold rates approaching $250 a gram, this offers little consolation to shoppers looking forward to Eid.
The current scenario presents a challenging environment for Eid gold shoppers in the UAE, balancing their desire for festive purchases against the backdrop of steeply rising gold prices. The market’s response in the coming days, particularly any potential corrections, will be closely watched by shoppers and retailers alike.
