The bustling gold market of Dubai, known for its vibrant Gold Souk, is witnessing a noticeable downturn in purchases as gold prices soar to unprecedented heights, nearing the $2,200 per ounce mark. Salespeople at various shops within the Gold Souk have reported a significant drop in transactions, transforming the traditional buying experience into more of a leisurely window-shopping activity.
According to Abdelnaser Alyafie, a Yemeni shopkeeper with six years of experience in the market, local buyers are particularly hesitant due to the exorbitant prices. While tourists, undeterred by the high costs, continue to make purchases during their visits to Dubai, locals are opting to postpone buying until prices potentially decrease.
Among the hardest-hit are the shops specializing in gold bricks, where sales have plummeted by half, according to workers at multiple locations. Mohammad Tariq, who manages one of the many Kanz Jewels stores in the market, noted a 40% decline in business this week, with a discernible shift in the customer demographic.
“Toursits won’t think about the price, they come to Dubai and buy,” Tariq commented, emphasizing the unique purchasing opportunities for visitors. However, he observed a reluctance among local buyers, with some opting to sell back pieces of gold to capitalize on the high prices.
The continuous rise in gold prices, spanning eight consecutive trading sessions, has caught many investors off guard. Speculation surrounding the Federal Reserve’s potential shift towards looser monetary policy, geopolitical tensions, and increased central bank purchases, particularly by China, have contributed to the momentum driving gold prices upward.
Despite the decline in sales, shopkeepers remain optimistic about future buying trends. Alyafie believes that customers will resume purchasing, especially for special occasions like weddings or for sentimental reasons, regardless of the elevated prices.
In essence, while Dubai’s gold market grapples with reduced sales amid record prices, the enduring allure of gold as a cherished commodity remains unwavering, even amidst fluctuating market conditions.
