For many expats in the UAE, gold is now serving a purpose more than just as an ornament.
They are making use of gold’s high value in recent days to sell and pocket much-needed cash, and thus make up for the sudden loss of jobs or salary cuts.
According to a report by Gulf News, with India allowing repatriation flights from May 7, there has been a noticeable pick up in such selling, especially among those expat Indians wanting to send their families back and having to shell out money for airline tickets. (The ticket prices are at Dh750.)
Gold in Dubai was retailing at Dh193.25 a gram for 22K early on Friday (May 8).
Market sources say most of these transactions are happening at the smaller jewellery outlets at the Deira Souq or Meena Bazaar.
In recent weeks, gold has been in the range of $1,690-$1,724 an ounce, easily the highest levels it has reached in the last seven years. This, more than anything else, is what’s driving the selling off by consumers.
As far as retailers are concerned, this is a double blow on their operations, according to Gulf News.
Because gold prices are at seven-year highs, there is limited buying activity. But those same price levels are getting cash-desperate “shoppers” to return to cash in on the high prices. Refusing their customer demand for cash is just not done in this business.