Gold Trade In Doldrums As Prices Climb New Heights

SEATTLE (Scrap Monster): The gold trade in the UAE continues to remain lackluster, say gold jewellery retailers in the country. The soaring gold prices are being blamed for the cold demand.

According to retailers, even promotions have failed to lift gold sales. Tourist’s demand for gold has slumped. The complete lack of interest by consumers is likely to impact third quarter sales significantly. The sales are projected to drop by anywhere between 8 and 15% or even lower, upon comparison with the recent years. Market sources anticipate unfavorable global economic and political circumstances, which could lead to further hike in gold prices, thereby weakening the demand further.

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The outcome of the upcoming U.S. Federal Reserve meeting will determine gold’s direction. In the event of further U.S. interest rate cuts, international gold prices could leap to $1,600 to $1,650 per Oz, thus taking the domestic gold prices to even higher levels of Dh 180 per gram. The current official Dubai gold rate stands at Dh 171.75 per gram.

The drop in gold demand is one of the worst in recent history, retailers noted.