Shopping for gold jewellery in the UAE became costlier during this Eid Al Fitr as prices reached an all-time high on Monday.
Gold jewellery shopping picks up during the festivals such as Eid in Dubai and UAE as many residents and visitors buy precious metal ornaments as gifts. But shoppers will have to shell out more this Eid to buy jewellery as prices have been consistently on the rise for the past few months.
On Monday morning, the 24K variant of the yellow metal rose Dh1.5 per gram to Dh283.5 per gram, the highest-ever price of the variant. The other variants – 22K, 21K and 18K – were also trading at the highest price ever at Dh262.5, Dh254.25 and Dh217.75 per gram, respectively.
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The precious metal prices have jumped by nearly Dh10 per gram in the UAE this month so far.
Many UAE employees will celebrate a nine-day-long Eid Al Fitr holiday this week. The moon sighting committee were scheduled to meet in UEA on Monday to announce Eid Al Fitr. If the crescent is not sighted on Monday (today), then Eid Al Fitr will be celebrated on Wednesday.
The impact of the price increase is mainly felt by the local shoppers who opt for a wait-and-watch approach, delaying their purchases for the prices to come down further.
Gold jewellery retailers in Dubai say that tourists don’t tend to hold their purchases when prices peak as they’re in the City of Gold for a shorter period of time and want to make the most of their visit.
“Resident consumers have the luxury to opt for a wait-and-watch approach during gold price hikes,” Shamlal Ahamed, managing director for international operations at Malabar Gold and Diamonds, told Khaleej Times.
Globally, gold prices have been influenced by the US Federal Reserve’s decision to reduce interest rates as well as investors becoming risk-averse following the tension between Israel-Iran after an attack on an Iranian mission reportedly killed seven people, including a senior commander of the Islamic Revolutionary Guard.
“When geopolitical tensions rise, investors looking to become risk-averse seek the safety of gold. Geopolitical tensions can lead to economic instability and rising inflation and gold has a history of preserving wealth during times of instability. The ongoing troubles in the Middle East are forcing the price of oil ever higher, fuelling inflationary fears, and adding to gold’s allure,” said Nick Cawley, senior strategist at dailyFX.