DUBAI — The increase in petrol price has affected price rise of various commodities in the UAE including the yellow metal. Gold has become very expensive compared to last year but still the sale of gold bullions and jewellery continues to soar in the UAE.
The price of 10 tola gold bar was Dh5,640 in September 2004 compared to the present price of Dh6,445 this month , quoted by Dubai Gold and Jewellery Group.
According to a market analyst, oil price has a very big impact on global economy and any increase in oil prices will lead to global inflation as a direct consequence of the increase in production and transportation costs.
Investment in currencies always depend upon the economic conditions, and the high oil prices will make the investment in currencies lose its lustre when gold becomes the natural choice for investments.
It is better to keep an eye on oil price which at this point of time has a direct link on gold prices.
Firoz Merchant, chairman of Pure Gold Jewellers and a member of the World Gold Council (WGC) told Khaleej Times, “There is no worry about the sales of gold in the near future and investment in gold was always the safest choice throughout the history of mankind.
When the gold touched the peak of $ 800 during Iran -Iraq war the stocks in many of the jewellery shops in Dubai were depleted due to the customer demand , expressing confidence in gold during bad and good times irrespective of the prices. There is more room for healthy players in the market as the Dubai's economy is in the growth path.’’
Regarding the competition in the UAE, he said: “With the influx of millions of tourists to Dubai, which is a major international tourist destination, and 90 per cent of the tourists flocking the jewellery shops in Dubai, before we talk about competition, we should see Dubai becoming the major market for the Gold in this region and even to the west. The establishment of refineries and Dubai gold receipt will boost the image of Dubai internationally and will make Dubai a mature market with international standards. ’’
This year , there has been a tremendous increase in the import and export of Gold Bullion and Jewellery in Dubai, as Dubai is a transit point for imports of bullion from Europe and export of bullion to Indian Subcontinent. Moreover, Dubai is also a transit point for the buyers and sellers of jewelleries from the Indian Subcontinent.