CaratTwo Dubai gold rates, 2% apart. Neither one is wrong
Two widely quoted Dubai gold pages read AED 512.45 and AED 523.25 a gram for 24-carat this morning, a gap of AED 10.80 or 2.11%. One is publishing the metal, the other the counter.
§1Two pages, one label, AED 10.80 between them.
Two of the most widely quoted Dubai gold pages disagree this morning by AED 10.80 a gram. LivePriceOfGold's Dubai board, timestamped 10 August at 10:07 UTC, reads AED 512.45 a gram for 24-carat gold and AED 470.43 for 22-carat. Goodreturns' Dubai page, dated the same day, reads AED 523.25 and AED 484.50. That is a gap of 2.11% on the 24-carat line and 2.99% on the 22-carat line, both percentages derived by this desk from the two published figures. A jeweller quoting a customer off one page and buying off the other is out by a meaningful part of a making charge before anyone has cut anything.
The arithmetic says which is which. Kitco's live board at 5:57am New York time on 10 August, the reading this paper's tape now carries, puts gold at $4,341.40 an ounce. At 31.1035 grams to the troy ounce that is $139.58 a gram, and at the dirham's fixed peg of 3.6725 to the dollar it is AED 512.59 a gram. Both conversions are this desk's arithmetic and are published by nobody. LivePriceOfGold's 512.45 sits AED 0.14 from that figure, three hundredths of one per cent, and the page states that it prints a raw gold rate to which commission and labour charges are added. Goodreturns' 523.25 sits AED 10.66 above it. Neither page is wrong. They are not publishing the same quantity.
§2The peg arithmetic says which is which.
The series makes the point harder than a single morning can. Goodreturns' own ten-day table for Dubai runs AED 485.25 on 1 August, 487.25 on the 2nd and 3rd, 485.50 on the 4th, 492.25 on the 5th, 510.25 on the 6th, 510.50 on the 7th, 523.75 on the 8th, and 523.25 on the 9th and again today, the page reporting no change at all against yesterday. Between 7 and 8 August that page stepped up AED 13.25 a gram. Spot gold across the same span moved from $4,314.50 to $4,341.30 an ounce, which is AED 3.13 a gram at the peg. Roughly AED 10 of that step was not the metal, and the page has held the new level flat for three days while spot has kept moving.
Neither page is wrong. They are not publishing the same quantity
§3A step of AED 13 against a metal move of AED 3.
This resolves a question this paper left open. On 7 August the edition printed three UAE retail readings for the same session and declined to choose between them: Khaleej Times at AED 517.50 a gram, one bureau desk at AED 510.25 and another at AED 514.00. Read against today's finding, those are not three attempts at one number. The peg arithmetic for 7 August gives AED 509.42, so the 510.25 sits on the raw-metal lane and the 517.50 sits on the counter lane. The spread this desk carried as an unresolved divergence across three editions was a category error rather than a data error, because it had not yet been established that two different quantities circulate under one name.
The number you quote is only as good as the lane it came from, and the Gulf gold trade currently runs two lanes under one label. There is nothing improper about either page. A raw-metal converter is the right instrument for hedging and for costing scrap; a counter rate is the right instrument for pricing a retail window. The failure is that neither is labelled clearly enough for a buyer to tell them apart, and the distance between them was 0.21% on 7 August against 2.11% today, so the error is not even stable enough to correct for by habit. The practical instruction for anyone dealing into the UAE this month is to stop quoting the Dubai gold rate as a single figure and to state the peg arithmetic beside it. At $4,341.40 an ounce the metal is AED 512.59 a gram, and everything above that line is somebody's margin rather than the metal.
The trade, filed to your inbox before the New York open.
Prices, tenders and the one story that moved the industry overnight — read in ninety seconds.
Subscribe free →