UAE Retailers Remain Optimistic as Indian Expatriates Continue Their Festive Gold Buying Tradition Amid Rising Costs
As the vibrant festivals of Dusshera and Diwali approach, jewellery outlets across the UAE are bustling with activity, even amidst a staggering 40% spike in gold prices compared to last year. Retailers are gearing up for brisk business, expecting a modest increase in sales value despite a potential drop in volume.
Gold prices have reached historic heights, with 24-carat gold now priced at Dh330.5 per gram and 22-carat gold at Dh306. This surge, reflective of international market trends where gold hit $2,731 per ounce, has not dampened the enthusiasm of Indian expatriates—who view gold as a symbol of wealth and prosperity during the festive season.
Joy Alukkas, chairman of the Alukkas Group, noted the resilience of buyers, stating, “We are witnessing a steady stream of buyers this year despite the high price factor. While shoppers may be purchasing less quantity due to record high prices, they remain upbeat, assured that their investment in gold during this auspicious time is both safe and rewarding.” The five-day Diwali celebration, commencing on October 28 and culminating on November 2, further fuels this demand.
K.P. Abdul Salam, vice-chairman of Malabar Gold and Diamonds, echoed this sentiment, suggesting that buyers may opt for slightly less gold this year. “For instance, those who used to buy 20 grams during the same season last year may now only afford 16 grams. Therefore, we expect a drop of up to 20% in quantity but anticipate closing the season with a slightly higher value,” he remarked.
Experts believe the ongoing increase in gold prices is driven by a confluence of factors, including a growing demand for safe-haven assets amid geopolitical uncertainties and anticipated interest rate cuts from major central banks. Saxo Bank’s APAC Research Team highlighted this trend, indicating that gold is on track for fresh record highs, bolstered by purchases of gold reserves among central banks and persistent investor interest in diversifying portfolios.
In response to the festive spirit, the Dubai Jewellery Group has launched its “Shine Bright this Diwali with City of Gold” campaign, offering discounts of up to 50% on select diamond and pearl jewellery collections. Leading retailers, including Damas, are enticing shoppers with additional incentives like free gold coins and gift coupons, further enhancing the buying experience.
As uncertainty looms over the Middle East, retailers remain optimistic about a buying spree this festival season, confident that gold will continue to shine as a reliable investment choice for many.
