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Eid Al Fitr: Gold Shopping Becomes More Expensive

Introduction Of Eid Al Fitr

Eid Al Fitr, a joyous occasion celebrated with fervor across the UAE, has brought about a unique challenge for gold enthusiasts and shoppers this year. As families and friends prepare to exchange gifts during this festive period, the soaring prices of gold have reshaped the dynamics of jewellery shopping, presenting both residents and tourists with a new economic reality.

Eid Al Fitr

In recent months, the price of gold in the UAE has been steadily climbing, culminating in record highs just in time for Eid Al Fitr. The 24K variant, considered the pinnacle of luxury in the gold market, rose to an unprecedented Dh283.5 per gram, a substantial increase of Dh1.5 within a single day. Similarly, other popular variants—22K, 21K, and 18K—reached historic peaks, trading at Dh262.5, Dh254.25, and Dh217.75 per gram respectively. This surge marks a significant shift in the landscape of gold commerce during the festive season.

The impact of these escalating prices is most keenly felt by local shoppers, who often adopt a cautious stance, preferring to delay purchases in anticipation of more favorable rates. Shamlal Ahamed, the managing director for international operations at Malabar Gold and Diamonds, notes that resident consumers are more inclined to employ a “wait-and-watch” strategy during price hikes, hoping for a potential downturn.

Conversely, tourists visiting the UAE, particularly Dubai—known colloquially as the “City of Gold”—tend to seize the moment, unfazed by market fluctuations, and eager to capitalize on their limited time in this glittering destination. The allure of Dubai’s renowned gold souks remains undiminished, drawing visitors with an irresistible blend of tradition and opulence.

Global factors, too, have played a pivotal role in driving gold prices to unprecedented heights. The decision by the US Federal Reserve to lower interest rates has spurred investor interest in gold, traditionally seen as a safe haven during times of economic uncertainty. Moreover, geopolitical tensions—such as those between Israel and Iran—have heightened risk aversion among investors, further bolstering gold’s appeal as a hedge against instability.

Nick Cawley, a senior strategist at dailyFX, underscores the intrinsic link between geopolitical turmoil, economic instability, and gold’s enduring value. “When geopolitical tensions rise,” Cawley observes, “investors seek the safety of gold,” a sentiment echoed by the recent escalation in oil prices—a byproduct of Middle Eastern tensions—fueling concerns of inflation and subsequently amplifying gold’s allure.

As Eid Al Fitr approaches amidst this economic backdrop, the resonance of gold as a symbol of prosperity and celebration remains undimmed, albeit against a more complex financial tableau. For shoppers and traders alike, the evolving dynamics of gold pricing underscore the intersecting currents of global finance, regional geopolitics, and local traditions, casting a reflective glow on this year’s festive season in the UAE.


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