UAE gold prices have jumped above $2,020 this week – the highest level since March of 2022.
The impact of the sudden jump in gold prices was noticed across Dubai’s jewellery trade as buyers were waiting for cues on a possible price reversal.
Retailers said the sudden fluctuation has caught the market off-guard as the jewellery market was gearing up for a sales boom during the upcoming festivals including Vishu, Easter and Eid Al Fitr.
Executive director of Kalyan Jewellers, Ramesh Kalyanaraman, said:“We are also hopeful about the upcoming festive and wedding season and have lined up fresh collections and started our campaigns around the same.”
Analysts predict that the metal is on track to return to previous highs of the $2,075 per ounce mark tested in 2020 and beyond.
Managing director for international operations of Malabar Gold & Diamonds, Shamlal Ahamed, said: “There has been a slowdown in customer purchases, but this is expected to be short-lived as Eid and the auspicious occasion of Akshaya Tritiya is around the corner, which will hopefully reignite buying tendency.”
Fitch Solutions has predicted that gold would notch a high of $2,075 in the coming weeks. The firm based that outlook on “global financial instability,” adding that it expects gold to “remain elevated in the coming years compared to pre-Covid levels”.
An analyst told Khalej Times: “A primary reason for the rally in the precious metals is the softening dollar index. The Index has fallen to a two-month low as there is a widening belief that the Fed may not only pause but start slashing rates by the end of 2023.
“Being a safe haven, and often attracts investors’ interest in times of uncertainty and slowdown, low rates.”
Demand for gold has also been exploding.
Chief market analyst at Kohle Capital Markets, Tim Waterer, said gold has become the star performer of the week against the backdrop of a weakening dollar.
“In the case of gold, it’s appearing to be an ‘asset for all seasons’ at the moment because not only is it still seeing buying flows as part of inflation-hedging, but it is also rallying during risk-on sessions as the dollar slides lower,” said Mr Waterer.
Demand for gold recorded a phenomenal rise in 2022 owing to “colossal central bank purchases,” according to the World Gold Council.
