14/11/2015 10:15 AST
The recent decline in gold prices, coupled with the Diwali season, has stoked up a buying frenzy at Dubai’s jewellery stores, with one of Dubai's biggest retailers reporting a “surge” in sales over the last few days.
Karim Merchant, managing director and CEO of Pure Gold Jewellers, said this is a great time for retail investors to stock up on gold, adding that prices could fall even further before the end of the year.
“We expect gold to pay in the range of $1,050 to $1,150 [per ounce] until the end of the year. We strongly feel that a price dip is a good opportunity for retail investors to enter the market and build their portfolio with a long-term view,” Merchant told Gulf News.
As of 2.30pm on Tuesday, 24-carat gold was retailing at Dh131.50 per gram, still down by Dh10 from nearly three weeks earlier. The price for 22-carat gold stood at Dh125.25, while 21K and 18K traded at Dh120 and Dh104 per gram, respectively.
Merchant said he has seen an increase in gold buying activity recently, with most consumers taking on interest in heavy jewellery pieces.
“Customers are using the fall in gold prices as an opportunity to slowly explore heavier weight design. Again, the buying [activity] is cyclical due to the upcoming wedding season.”
Until last Monday, the bullion had been on a losing streak for eight days, dropping to as low as $1,100 an ounce and dragging retail prices in Dubai to as low as Dh131 per gram. As of 0646 GMT on Tuesday, spot gold was trading at $1,092.35.
“"Gold will stay below $1,100 as the interest rate hike becomes more and more imminent," Mark To, head of research at Hong Kong's Wing Fung Financial Group, was quoted by Reuters as saying.
The decline has been attributed to heightened expectations of a Fed rate increase in December, fueled by strong employment data in the United States.
The United States economy added 271,000 non-farm jobs last October, particularly in the professional and business services, health care, retail trade, construction and food service industries, according to the Bureau of Labour Statistics.
Gulf News
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