Consumers cannot get enough of gold, Dubai Duty Free's latest sales figures have shown.
But the news was not so positive for those investing in the precious metal after the commodity dropped to its lowest price in six weeks on Friday.
Dubai Duty Free said yesterday that its overall sales had climbed 16.6 per cent to Dh2.54 billion in the first half of this year from the same period last year. But gold sales had jumped 24 per cent inthe period, and the metal was among the company's three best-selling products, said Colm McLoughlin, Dubai Duty Free's managing director.
"We have seen consumer spending increase across most categories with significant spikes in luxury-sector products," Mr McLoughlin said.
As gold prices dip to their lowest point since mid-May, it appears consumers are now able to buy a slice of luxury at a discount.
For investors, however, a dip in the price of the commodity is bad news.
On Friday, gold slid 1.4 per cent to US$1,478.01 a troy ounce as the passage of austerity measures in Greece, the end of quantitative easing in the US and falling commodity prices curbed appetite for the metal , which is traditionally seen as a haven.
These factors were some of the major forces behind gold's rally in the past few months, because uncertainty in global markets typically prompts investors to buy into stable assets such as gold.
Gold prices have gained 9.5 per cent since mid-January on increased fears of a global economic slowdown.
Pradeep Unni, the chief trader at Richcomm Global Services, a brokerage in Dubai, said he was not recommending that clients buy gold until the commodity fell to $1,400 an ounce. It was last at that price in mid-February.
"We had bought gold and other commodities earlier this year, but from last week onwards, we were actually off-loading profits in gold," Mr Unni said. "We had a fear that [gold] was losing its momentum. It is not going to be able to progress in the direction it was at earlier this year."
