Pay now, collect later plan for gold

Gold reached its highest-ever price this week - $1,609.51. (CHANDRA BALAN)

Retail gold buyers in the UAE have begun to spot-book their purchases because of the spiraling price of gold.

Several retailers across the UAE told this website that they are accommodating customers who buy gold at today’s prices – but only take delivery in a few months, say just before a wedding.

The trend is primarily prevalent among the Indians in the UAE, who form the largest buyers of retail gold.

Gold reached its highest-ever price this week - $1,609.51 – however by Wednesday, prices pulled back.

Yet in terms of the near-future, no haven looks safer than gold. And savvy consumers expect the price to keep rising.

Sailesh Sreedharan, Chief Investment Manager, Chemmannur International Jewllers, Dubai, said, “The reason for high appetite for gold is that gold price has been going up and is not coming down. Most jewellers are offering gold booking schemes. Customers who want to buy a reasonable quantity of gold for marriages now can book one year in advance and take the stock near the marriage day.”

“November December is the most demand for marriage gold sales. For the forthcoming marriage season many people are booking gold in advance,” he added.

Sajith Kumar, Chief Executive Officer, JRG International, a commodity trading company in DMCC, said, “Gold price hit a record, but due to profit booking it came down on Tuesday night. Predictions suggest that gold will be between $1600 to $1800, but gold sales are not affected because traders and customers have fine-tuned their mind set to a high gold price. People who have been keeping away from the gold market due to high prices are coming back with a systematic investment plan,” said

Speaking to Emirates 24|7, leading jewellers said that the beginning of school vacation, Ramadan and forthcoming Onam season have all prompted customers to buy gold ornaments, even though the per gramm price on Tuesday touched Dh 187.5. 

“Gold market, wholesale and retail, are doing well because people have faith in gold investments and many expatriates who will be travelling to their home countries for summer vacations are buying gold ornaments. Our wholesale division and retail divisions are doing well,” said Sanjay Gora, Manager, BRR Jewllery, a leading wholesale ornament supplier for companies like Joy Alukkas, Atlas Jewllery, Damas and Chemmannur Jewllery.

Reuters reported that gold rallied for 11 straight sessions before today, and the market became stretched. Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong says he expects gold to remain well supported at the $1,570 to $1,580 level in the short term. 

"The market is still looking bullish, and by end of the year we may see prices rise to $1,800 or $1,900." 

Uncertainties around sovereign debt in both Europe and the United States, as well as global economic growth in the second half of the year, are likely to remain supportive of gold.

Print Email