Gold Prices Soar as Dubai’s Gold Market Takes a Hit

The gold market in Dubai is experiencing a severe decline as the price of gold reaches a record high of nearly $2,200 per ounce. Local residents are refraining from purchasing gold, resulting in a significant drop in sales at the renowned Gold Souk. Instead, tourists, particularly those from the UK and the US, are taking advantage of the opportunity to purchase unique mementos that are not commonly found in their home countries.

Local Residents Cautious Amid High Gold Prices

Abdelnaser Alyafie, a seasoned vendor at the Gold Souk, shares that local residents are questioning the exorbitant prices and, as a result, are cutting back on their purchases. The high prices are deterring them from buying large items, opting instead for smaller pieces. Alyafie reveals that customers are waiting for prices to drop before making significant purchases.

Tourists Continue to Shop Despite High Prices

Mohammad Tariq, manager of one of the many jewelry stores in the Gold Souk, discloses that business activity has dropped by approximately 40% in the past week. However, tourists who visit Dubai are not concerned about the high prices and are willing to indulge in shopping. For them, it is a once-in-a-lifetime opportunity to acquire unique items on their vacation. Tariq also notes that some customers are selling their gold to cash in on the high prices.

Surprising Surge in Gold Prices

Gold prices have seen eight consecutive trading sessions of growth, leaving many investors perplexed over the lack of a clear catalyst. Speculations around the US Federal Reserve shifting towards a loose monetary policy, geopolitical risks, and central bank buying, particularly from China, are believed to be the primary drivers behind the recent surge in gold prices, according to Bloomberg reports.

Traders Shocked by Market Slowdown

Traders at one of the oldest gold markets in the United Arab Emirates expressed their shock to Bloomberg reporters. One anonymous salesperson, who has worked in the Souk for 22 years, said, “It’s unbelievable. Once they see the price of gold, they will run away.” Abdelnaser Alyafie confirms a 33% decrease in sales at his stores. While visitors primarily browse or try on jewelry, Alyafie remains optimistic that customers will return, especially those preparing for weddings or looking to make a last-minute purchase before leaving Dubai.

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