Gold’s continued decline in value has attracted more jewellery shoppers to the UAE’s retail stores, helping businesses recover further from their COVID-19 slump, according to a top official from the Dubai Gold and Jewellery Group (DGJG).

“Buyer sentiment has improved steadily over the last few months and retail businesses are witnessing a good momentum,” Tawhid Abdulla, the chairman of DGJG, told Zawya on Tuesday.

Abdulla would not specify how much sales have increased recently, but he noted that the recent price decline has played a significant role in boosting retail revenues. According to him, the price of gold is at "comfortable levels currently" compared to the period that followed the outbreak of the pandemic. "This has boosted retail activity further.”

Bullion has fallen sharply this year on the back of optimism over global economic recovery.

The price is currently hovering above $1,700 an ounce, down from near $2,000 an ounce in December 31, 2020.

What analysts think

As of today, gold prices in the UAE stood at 161.50 per gram ($44) for 18K and 210.25 for 24K. However, analysts are split as to whether prices will improve over the week.

According to Ole Hansen, head of commodity strategy at Saxo Bank, there is no strong indication of an imminent price rally.

“For now, gold remains stuck in no man’s land and despite having seen a slight improvement in the technical outlook, that’s where it remains,” he said.

“For that to change and in order to attract renewed demand, especially from leveraged accounts, it needs to retake $1,765 an ounce and until it does we maintain a short-term neutral outlook.”


Jewellery sales in the UAE suffered a huge setback during the early part of the pandemic last year, mainly due to the closure of non-essential shops during the lockdown and subsequent decline in tourist traffic.

Sales started to improve during the last quarter of 2020, when stores re-opened and COVID-19 restrictions eased further.

“Buyer sentiment [has continued to improve this time] and retail businesses are witnessing good momentum. For tourist-driven markets such as Dubai, international travel scenarios will play a significant role in the business prospects,” Abdulla said.

“Consumers trust the yellow metal even more now. It is surely a safe haven for investors,” he added.

(Reporting by Cleofe Maceda; editing by Seban Scaria)

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