At $1,650 levels, gold is regaining the attention of buyers as a safe haven

[ad_1]

Dubai: Global consumer demand for gold jewelery had its best quarter ever as prices fell by 8 per cent during the period. In fact, at 523 tonnes, jewelery purchases in the July-September period were higher than the five-year quarterly average of 501 tonnes.

“Demand for jewelry is back to pre-Covid levels,” said John Mulligan, Director for Market Relations at the World Gold Council. “What we are seeing is a good consumer market, and apart from jewelry there are also strong bars and money.”

This practice continues. In the UAE, October has been a very strong month, as prices have been kept around $1,650 per ounce (or below Dh190 per gram of 22K according to the UAE gold price) for a long time. Meanwhile, gold prices have dropped to $1,632, ahead of the US Fed’s rate hike on Tuesday (November 2), which means the dollar gains and bullion prices fall.

Diwali brings golden light

Consumer demand in the UAE was fueled by low gold prices and heavy shopping in the run-up to Diwali on October 24. Retailers say the actual weekend sales were the best they’ve had so far this year.

In those days, foreign purchases have become more visible to support demand, as the ‘safe haven’ to buy gold is expanding. “Tourists from other Gulf countries, especially Saudis, and the Indian subcontinent have been buying gold in October,” said the dealer. “If prices remain at around Dh185 per gram, we can expect tourists to remain interested in the next two months.

“In terms of residential buyers, it may take some time to get back to what we saw in Diwali.”

Tourist-led buying will continue despite the Fed’s latest rate hike, which is expected to be 0.75%. (If so, this would be the fourth time in a row that this increase has occurred along the coast.)

“It’s not the case that gold prices fell at the same time as they increased everywhere in the US,” Mulligan said. “A lot is already invested in gold prices, that’s why there is little risk when it starts working. And even if there is a storm, it won’t last long.”

8% depreciation.

During the past quarter, the price of gold fell by 8 percent, having been in the $1,700 range for the better part of the year. (In March, gold rose above $2,000 shortly after the Russia-Ukraine conflict.)

“In a very difficult year for the financial and bond portfolios, gold has done well,” Mulligan said. “Year-on-year, gold is down 3 percent.”

Between July and September, one of the reasons for the strong display in jewelry was related to shopping in India. This even when the import tax was raised to 15 percent. “India’s gold and jewelery market is poised for exciting changes,” said Mulligan. “Despite the realities of job growth, the stabilization of demand is happening quickly.

“In recent years, there has been a great demand from rural consumers. I don’t know if Diwali itself was special, but it was strong enough.”

[ad_2]

Source link