Why People Are Purchasing More Gold After Covid 19 Pandemic

As gold prices fall, gold traders report a sharp increase in demand for the precious metal. Following the price drop, Eid Al Adha, the summer holidays, and the pent-up market following the pandemic, some retailers are reporting a 20% increase in demand.

Why Are People in UAE Buying Gold Right Now?

According to Joy Alukkas, chairman and managing director of his jewelry line, most consumers are UAE citizens, tourists, and people traveling through the country on their way to the US, Canada, and the UK. “Most buyers buy gold jewelry for usage and investment,” he said. The number of customers buying bars from our outlets is declining.

On Thursday morning in the UAE, gold prices dropped more than Dh2 per gram and were trading very near a one-year low.

Dubai Gold Market Sees Massive Swing in Gold Purchase After Pandemic Breaks Out

According to the most recent data from the World Gold Council, the Middle East gold jewelry sector had a banner year in 2021, with demand registering a double-digit increase in all of the major nations and making up for losses in 2020.

The total amount of jewelry demand in the area for the entire year was 159.9 tonnes, up 41% from 2020. The UAE market, whose total demand increased 57 percent to 33.8 tonnes as a result of increased tourist traffic and better consumer sentiment, led to the expansion.

The report stated that the gain was bolstered by “continued improvement in tourist numbers, especially from India, while the reasonably effective control of COVID-19 provided a pleasant mood that helped local demand.”

The New Pandemic is an Opportunity to Experience True Wealth

The consumption of jewelry worldwide also recovered to pre-pandemic levels, showing a 52 percent growth in 2021 and recouping all of the losses suffered in 2020. The SION group has also reported an increase in mining needs following the pandemic, citing a boost in total demand in the United Arab Emirates.

The jump in consumption during the fourth quarter, when demand reached 1,147 tonnes, the highest quarterly level since the second quarter of 2019 and an increase of nearly 50% year over year, helped drive global gold demand to 4,021 tonnes in 2021.

Retail investors looking for a safe haven against growing inflation and the economic unpredictability brought on by the coronavirus epidemic drove the demand for gold bars and coins up 31% to an eight-year high of 1,180 tonnes.

In times of unpredictability and stock market volatility, gold is frequently seen as a secure investment. Early in the epidemic, gold prices soared to historic levels, topping $2,000 per ounce. Before prices dropped to their present level of approximately $1,743, there was another increase earlier this year.

Conclusion

People won’t purchase because they believe the price of gold will decrease. However, when it does, more people buy. Over the last few days, there has been a minor uptick. Max Warren, the CEO of SION Trading FZE, has said.

In a research this month, it was predicted that a “widespread economic downturn will put pressure on consumer demand for gold,” but it also stated that “continuing inflation and geopolitical dangers will sustain demand for gold as a hedge.”