Despite decrease in prices, Pakistani expats in UAE not buying gold

Pakistani expats in United Arab Emirates (UAE), alongside their neighboring expats, are avoiding buying gold despite a six percent decline in gold prices amid recent devaluation of rupee.

“You have the [Indian] rupee at 18.70 to a dirham and there’s the sentiment that it might break the Rs19 level…. The Pakistani rupee too has depreciated so badly (by 15 per cent since the start of the year and is currently at 33.14 to the dirham),” said Cyriac Varghese, General Manager at Sky Jewellery, quoted Khaleej Times.

“When you have a currency decline at these levels, any drop in gold prices neutralises buyer sentiments. You have traditional gold buyers thinking of making use of the currency decline to send funds back home. That’s what we have been seeing for the last 10 days,” he added.

Just weeks ago PKR fell an all time low against UAE Dirham, reaching 33.11 against the Emirati currency, which was the lowest level PKR has dipped in its 70-year history. Meanwhile, gold is currently around at Dh142 a gram for 22k as per the Dubai bullion rate.

However, the resistance against buying gold is not all due to the currency devaluation, as value added tax and the import duty are also making the shoppers wary.