UAE maintains Eid appetite for gold despite rising prices

Retailers in the UAE have reportedly recorded an up to 40 per cent increase in gold jewellery sales in the build-up to Eid despite prices rising to a two-year high on Monday.

Gold prices have increased by roughly 25 per cent in the last six months, from around $1,078 per ounce in January to almost $1,370 in July, following economic uncertainty at the start of the year and the recent Brexit vote.

Samer Jewellery managing partner Kamel Al Chaar told Gulf News that gold remained a popular gift among families in the Middle East during Eid.

“Our sales have gone up by around 40 per cent leading up to Eid,” he told the publication, noting that recent economic uncertainty had not dented the appetite for the precious metal.

“I would say 90 per cent of ladies like to wear gold and people buy things to make their loved ones happy,” he said.

However, Al Chaar noted that smaller items weighing three to give grams had become more popular with the increase in gold prices.

Al Jazira Jewellery manager Hussain Esmail also told Gulf News that sales had not been affected by prices increases before Eid, with purchases of rings, bracelets and other items increasing dramatically.

“Gold is a gift that can be worn, exchanged or sold for more value later,” he said, noting a 30 per increase in sales before the holiday, a greater jump than last year.

Gold and silver prices rose to a two-year high on Monday before dipping slightly after failing to break $1,358.

In a release yesterday, FXTM chief market strategist Hussein Sayed it made sense to have a considerable amount of gold in any investors portfolio due to negative yields from sovereign debt in 40 per cent of developed economies.

“Although I’m not a big fan of gold, current geopolitical and economic risks will likely lead more investors to increase their allocation in gold with $1,400 a potential target in the short run,” he said.