Gold clears $3,100 for first time, and shoppers are not letting that distract them
Business Editor
2 MIN READ
These days, gold prices are only heading in one direction. UAE shoppers are playing this to their advantage.
These days, gold prices are only heading in one direction. UAE shoppers are playing this to their advantage.
Bloomberg
Dubai: UAE gold shoppers are changing their strategies to make best use of surging prices, with the local gold rate inching closer to Dh350 a gram for 22K. This morning, gold has raced past $3,100 an ounce for the first time, gaining over $20, as the global economic situation feels the stress of more US tariffs from early next month.
The UAE gold rate is currently at Dh344.25 for a gram of 22K, after shooting up from Dh339.5 on March 27. But UAE gold shoppers are by the looks of it not letting that impact too much on their buying during the Eid holidays.
Exchange costliest jewellery for smaller
“We can see shoppers come in with some of the pricier jewellery pieces – say, anywhere from Dh5,000 each – and then exchanging for multiple pieces for the same grams,” said a gold retailer.
“They are splitting it up because they see gold prices gaining more in the future. They believe more jewellery pieces rather than a single pricier one gives them more room to make future profits. At least, it gives them greater flexibility.
“We even had tourists exchanging their pricier jewellery for smaller pieces with the intent to sell when they head back to their home countries.
‘For instance, we are seeing many visitors from India and Pakistan doing it since Friday last. Because they also get the advantage of the favourable AED currency factor.” (The cost of a gram of 22K in India is at Rs8,167. A dirham is currently getting 23.13 Indian rupees.)
Clearly, UAE shoppers are thinking outside of the box in their dealings in gold. In effect, building the perfect 'insurance' for the future using the gold they already have.
Saudi, GCC tourists make a tidy profit
Some of the same buying and selling trends are visible with visitors from Saudi Arabia, spending their Eid break in the UAE.
“We are seeing a mini-rush of visitors from Saudi Arabia and some of the other GCC states this weekend,” said a Dubai-based jeweller. “Many of them were exchanging jewellery they bought as recently as 6-12 months ago from our stores there.
“Not only do they get the benefit of the gold price difference, they can also get the added benefit what they paid as VAT at that time. In effect, it is a major cost benefit for them.”
Saudi Arabia has an 15% VAT, while tourists can reclaim the 5% VAT once they leave the UAE.
"We have also seen some visitors from Bahrain do the same, with the Bahrain VAT being 10%," said the jeweller. "At current gold prices, there is plenty of space to cash in."
Trump and tariffs
This is going to be a high intensity week for gold and every other asset, with the US set to announce a further set of tariffs covering multiple sectors and products.
Amidst all this, gold continues its price rise, as investors seek safety in all the turmoil spooking the markets.
Quite a few shoppers in the UAE too are using the price rise to their advantage.
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