Gold is declining… and traders are hedging prices by buying bullion and jewelry

At the end of last week, gold prices recorded declines with values ​​ranging between 1.5 and 2.25 dirhams per gram of various karats, compared to their prices at the end of the previous week, according to the price indicators announced in the Dubai and Sharjah markets, while these declines come after successive increases achieved by the yellow metal during the last period. The price of a gram of 24-carat gold reached 506.75 dirhams, a decrease of 2.25 dirhams, while the price of a gram of 22-carat gold reached 469.25 dirhams, a decrease of two dirhams.

In turn, the price of a gram of 21-carat gold reached 450 dirhams, a decrease of two dirhams, and the price of a gram of 18-carat gold reached 385.75 dirhams, a decrease of 1.5 dirhams.

Officials of gold and jewelry trade outlets agreed to “Emirates Today” that the markets are currently witnessing a demand by dealers to buy gold jewelry, as part of a “hedge” against expected price increases in the future, in addition to an increase in demand from dealers for bullion for savings purposes.

In detail, Iyas Rana, the sales official at the “Al-Mawjih Gold and Jewelry Trading” store, said, “The markets are currently witnessing remarkable rates of demand from dealers to buy gold bullion for savings purposes, while a number of dealers are agreeing to buy their supplies of gold jewelry as part of a hedge against expected price increases for the yellow metal during the coming period.”

He added: “The demand for buying bullion accounts for the largest share of sales during the current period in the markets, following the large price increases recorded by gold during the recent period, which increased dealers’ confidence in purchasing bullion for the purposes of saving and investment.”

For his part, the sales official at the “Syed Jamal Shah Jewelry” store, Habib Shamashul, said, “A number of dealers prefer to buy during the current period, as a hedge against future price increases, which includes jewelry and gold bullion of various types.”

In the same context, the sales director at the “Al-Shami Jewelery” store, Danny Al-Khoury, said, “Demand operations are witnessing a variation in sales of bullion and gold jewelry, in light of many consumers awaiting price indicators, and some of them are heading to buy gifts of jewelry for different occasions, with expectations of new rises in the prices of the yellow metal during the coming period.”

As for the sales manager at the “Al Sarraf Jewelry” store, Abdullah Muhammad Ali, he said, “The return of gold prices to decline at limited rates after increases in large values ​​has prompted many dealers to follow a policy of (hedging) against any future price increases, by purchasing their needs of jewelry or bullion that they previously postponed their purchase decisions due to the price increases that the yellow metal gained during the previous weeks.”