A new gold rush is going on as hordes of desperate buyers – including expats – try to buy the precious metal in the United Arab Emirates as prices plummeted.
Rumours abound that gold bars have been pulled from sale in Dubai and Qatar as gold fell to the lowest value in two years.
Buyers there are now frantically buying gold jewellery in the UAE despite the price showing the sharpest drop in value in 30 years.
Expats are also joining the queues forming at jewellery stores among rumours that gold bars have been pulled by traders waiting for the price to increase again.
Even those expats on low incomes are joining the queues to invest what little money they have into gold.
Gold rush in USA
In addition, the US Mint recently announced that it had suspended sales of American Eagle gold bullion coins, which contain one-tenth of an ounce of gold, because of unprecedented demand.
Buyers snapped up 175,000 ounces in American Eagle gold coins in just three weeks in April – and the final figure could match the previous high sale of 231,500 ounces set in December 2009.
Gold is popular in Dubai and Qatar, which host famous gold festivals and there are even vending machines selling bars of gold but now many buyers are struggling to find supplies.
Expats are reporting that outlets claim not to have any gold bars in stock with many believing that they have been taken off sale until the price of gold recovers.
Since the price of gold plunged, some stores have reported that business has doubled and that many of the buyers are single workers.
Speculators look for profits
The tumbling price of gold triggered a crisis on the markets. Many pointed to speculators deliberately creating the fall to engineer quick profits.
Commodity analysts were also taken by surprise since many had predicted that gold would be pushed onto higher levels this year – potentially peaking at $1,800 an ounce. The value has since bounced back slightly to hover around the $1,400 mark.
Michael Kramer, a New York-based coin dealer, says he has been inundated with clients clamouring to buy gold before the price rises again.
“People believe that gold is at its lowest price and they want to take advantage which means it’s been one of our busiest ever times – though at one stage it felt like panic,” he said.
Some estimates have put a value on the gold rush in the UAE at £1.75 billion in April alone as buyers swooped for the precious metal.