Dubai gold price could be in for a drop - here's why
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Dubai: The Dubai Gold Rate is up just over Dh3 early Friday (May 2) to Dh362.25 a gram for 22K – but shoppers shouldn't lose heart. There are more reasons emerging that gold could be in for a softer pricing range in the coming days, according to jewellery retailers.
Shoppers, especially tourist buyers, should wait to see where the gold pricing could be headed in the morning hours. There are hopes that post-afternoon, there could be some softening from the Dh362 levels and which would then lock the price in for the weekend.
'Yesterday, it felt that Dubai gold rate could slip to Dh355/Dh356 levels from Dh359,' said a gold retailer. 'There was higher than average tourist buyers in the afternoon as a result. But I am positive that gold could, in the short term, will come back down to Dh350 a gram for 22.' (The Dh359 of last evening was the lowest local rate since April 15.)
Is there reason for such optimism?
Yes, the signs are there that the kind of volatility gold prices recorded for all of April might be abating. The biggest plus factor would be China's comments that it could look to negotiate its way out of the tariff crisis with the US. (Both countries have import tariffs on the other of over 100%.)
The high stakes US-China trade tensions was the primary reason why gold prices shot off further into record territory in the second half of April. At one point, the Dubai gold rate for 22K even looked ripe to barge past Dh400 a gram after reaching Dh388. (A gram of 24K had already shot past Dh400.)
Back to Dh340 levels? Even lower?
'A lot of April's high gold prices resulted from the tariff situation – if those ease, there is no reason why bullion can't cool down to $3,150 an ounce levels,' said an FX analyst. 'The US and China need to talk, and that's the signal global markets need – and for gold prices to settle lower.'
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