We had an open house at Consul General of Malaysia's residence at Barsha and caught up in the jam. By looking at the standstill traffic along Sheikh Zayed road for several kms, I thought Dubai was in disaster zone!
Drop in prices sparks gold rush
Abu Dhabi/Dubai: Thousands of people jammed the town centre Thursday night and Friday afternoon as they rushed to buy gold with prices plummetting to as low as Dh 80 for a gram of 22 carat gold.
A combination of lower oil prices, financial meltdown, profit-making and the upcoming Diwali festivities had played a vital role to push gold prices down by 20 percent, a major gold jewellery dealer said.
"The volume of sales increased 400 percent Thursday night,” said Tushar Patni, Chairman of Golden Jewellery Group of Abu Dhabi. He said sales at each sales amounts to between 30 to 50 Kilos of gold in one shift ", he explained.
Gulf News witnessed the rush to buy gold which lasted until midnight. Gold shops owners said that the buyers are all expats who wanted to cash on this "golden" opportunity.
"I think it is a one-off chance to invest in gold", said Baqir Akbar, a Pakistani IT engineer who has been working in Abu Dhabi for two years.
"I could maximize the returns of my saving through buying into cheap gold", he explained.
Patni agreed saying that expats who missed a similar opportunity two months ago are determined to grab this one.
"We had similar drop in the gold prices in August down to Dh 84.", he said. "Some people were not financially ready and a lot of them were away on holidays and they missed that opportunity."
Those who bought gold then made a profit when the prices went up again to Dh 104 a gram after that short period.
There are about 125 gold shops in Abu Dhabi, 85 of them are members of the Gold Jewellery Group.
The drop in gold prices will also be short-lived and retailers expected it to last for a week before picking up again.
"We expect this low price to last for one week only", Patni said. "Gold shops will have a special sales day on Sunday. At the end of next week prices can go up and those who are now buying gold can make a profit".
‘Our raffle barrels were full’
In Dubai, the famous Gold Souq and gold shops were also swamped by buyers. Swapna Nair, general manager of Dubai Gold and Jewellery Group, said she expects the same huge rush on Danteras, when Indians have to traditionally buy gold on that day.
“This is biggest drop in price for a long time,” she said. The last time prices dipped down was during the Dubai Summer Surprises, to Dh 84.5 per gram.
“Our raffle draw barrels could not turn (beacuse of the vouchers inside). The large population of Indians in the UAE makes a lot of difference (to the sale of gold),” she said.
A gram of 24 carat gold is presently selling at Dh 86. Indians prefer 24 carat gold jewelery.
Nair said it was very difficult to predict gold prices in the near future as it depends on many factors. “Oil prices are down, so gold prices are down. But the dollar is strong,” she noted.
The Dubai group has 750 traders as members.
Diwali celebrations will start on October 28.