Gold rush un­der­way in UAE

Pakistan Observer - - ECONOMY WATCH -

DUBAI—Start­ing Fri­day af­ter­noon, jew­ellery stores in the UAE and other Gulf mar­kets recorded a marked in­crease in foot­fall as shop­pers tried to stay one step ahead of fur­ther in­creases in gold prices.

The higher foot­fall has ob­vi­ously trans­lated into more pur­chases, with some of the big­ger re­tail chains av­er­ag­ing Dh3,000-Dh4,000 a trans­ac­tion.

But vol­umes on a per gram ba­sis did not move up ap­pre­cia­bly be­cause of the higher price per gram. On Fri­day, 22k in Dubai was quoted at Dh150.446 an ounce against the pre­vi­ous day’s Dh143.672. Ac­cord­ing to lo­cal re­tail­ers, there is enough bul­lion avail­able to meet de­mands, even an in­creased ap­petite, among re­gional shop­pers.

Fri­day’s spike set off by the shock over the UK ref­er­en­dum re­sults prompted many jew­ellery shop­pers es­pe­cially those from In­dia — to bring for­ward their pur­chases ahead of the va­ca­tions back home. What is ironic about the cur­rent sit­u­a­tion is that con­sumer de­mand has spiked when gold jumped it­self back into the $1,300 (Dh4,771) plus an ounce range, when it had pre­vi­ously seen tepid sales at $1,200$1,250.

Lo­cal gold sales could have put in higher vol­umes if it were not for the fact that many prospec­tive con­sumers de­cided to be­come for­eign cur­rency spec­u­la­tors by buy­ing a weak­ened pound on Fri­day and Saturday. There was a rush to the cur­rency houses to snap up pounds where pos­si­ble as a herd men­tal­ity took hold.—Agen­cies

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