Daijiworld Media Network (SR)

Dubai, Jun 23: Gold shoppers were in for a shock when the Jewellery shops opened for business on Thursday. The price of the yellow metal shot to a five year high in Dubai on Thursday and 22-carat was selling at Dh 156.75 per gram, up from the previous day closing of 152.75 per gram.

The rise in local price coincides with the hike in global bullion prices which has also hit a five-year high, after the US Federal Reserve indicated possibility of a rate cut on Wednesday. Gold is always considered to be a hedge against inflation and is a preferred asset class during times of market volatility.

As per a gulf news report, General Manager of Sky Jewellery Cyriac Varghese told the publication that, "Gold prices had been relatively stable for the past five months, but the moment the Fed decides it will cut rates, the situation will change. Every indication points to further rises for gold”. Market sources are saying that further rise in prices will dampen gold and jewellery demand in the UAE market.