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UAE: Some residents sell gold, jewellery as prices of yellow metal hit record

Many individuals see the precious metal as a long-term investment and choose to hold back despite the high rates

Published: Mon 22 Apr 2024, 9:19 AM

Updated: Wed 24 Apr 2024, 12:18 PM

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FILE PHOTO: A customer checks a gold necklace before buying it inside a jewellery showroom. Photo: Reuters

FILE PHOTO: A customer checks a gold necklace before buying it inside a jewellery showroom. Photo: Reuters

Some UAE residents are selling their gold and jewellery to cash in on the ever-increasing prices of precious metals. Gold prices hit an all-time high recently, reaching $2,395.29 an ounce, while US gold futures touched $2,401.8 per ounce. The prices were driven higher by central banks’ continued buying of gold to add to their reserves.

In the UAE, the 24K variant of the precious metal was trading at Dh289.5 per gram, while 22K, 21K and 18K were selling at Dh268.25, Dh259.5 and Dh222.5 per gram, respectively.

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Investors and some residents in the UAE tend to buy when prices are low and sell when they believe that the prices have peaked, helping them earn additional income.

John Paul Alukkas, managing Director, Joyalukkas Group, said as a strategic move to capitalise on the current market peaks, some residents may be taking advantage of the record-high gold prices by selling their jewellery, coins and bars.

“Many individuals see gold as a long-term investment and will choose to hold onto their holdings despite the high prices,” said Alukkas.

Joyalukkas Group's managing director revealed that when gold prices are low, many see it as a good time to invest. “On the other hand, when prices peak, a few residents opt to sell their holdings to benefit from the higher market value. It's a cycle that's often influenced by market dynamics and individual investment strategies,” he said.

John Paul Alukkas

John Paul Alukkas

In addition to central banks, China is another factor that has been fuelling the bullish market mood. “While demand has picked up last year, it has slowed again more recently. Our expectation for Chinese gold demand is similar to that for central bank buying: it should stay strong, but we do not expect a constant increase,” said Swiss bank Julius Bar.

Ray Jia, research head for China at World Gold Council, said gold jewellery consumption is likely to remain tepid as the market enters the traditional off-season for demand, especially with a local gold price that keeps refreshing record highs.

“On the other hand, the shining performance of gold compared to other local assets has attracted increasing attention from investors. And this could mean continued strength for gold investment demand in China,” he said.

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