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DUBAI: The UAE’s gold and jewellery markets are entering their busiest 10 days of the quarter, with shoppers looking to take advantage of the latest drop in gold prices ahead of Diwali on October 24.
At AED 187.75 per gram of UAE gold at 22K today, resident shoppers have an advantage of AED 16.5 compared to AED 204.25 during the same Diwali period last year. If you compare it to the price of gold during Diwali 2020, the shopper’s advantage would be Dh27.75, when the price was Dh215.50. (They will be a little disappointed if they look at gold prices ahead of Diwali 2019, when it was AED172.25 per gram in the UAE.), from the current $1,644 per ounce,” said a jewellery retailer “If the UAE gold price subsequently falls below Dh185, then the trade here is looking for a selling bright spot for Diwali buys.
“Following the trend last night (Oct 14), we had been hoping for gold to break below the $1,640 level. That didn’t happen, but Monday looked promising.” (Diwali in India is considered a good time to buy gold and diamonds , represents the peak buying period for the UAE’s gold retail market. Another Indian festival-related purchase occurred during the “Akshaya Trithiya”.) According to Anil Dhanak, managing director of Kanz Jewels: “As usual, we see buying during the festival period. Interest in gold and jewellery is growing. Yes, with gold in its lowest range this year, we expect a further boost this year.”
Our customers see this auspicious buying season as the perfect time to take advantage of lower prices.
– Anil Dhanak of Kanz Jewels
By now, most gold buyers in the UAE know how to make their next purchase during price volatility. Once they decide to buy, all they need to do is wait for a price that they feel is right, then make a reservation at that price with a 5-10% down payment. Then, all they need to do is choose a date to actually buy – and they will benefit if the price of gold slides further. If the price rises from their predetermined level, they will still benefit from the lock-in.
“In the past two months, when gold prices fell to three-year lows, nearly 50 percent of our shoppers went online to lock in prices,” said one jeweler. “These aren’t millennial or Gen Z shoppers, but these shoppers know how to get the best deals.” (The retailer also offers cash-back programs and lowers Diwali production costs.)
Indian tourists also
Diwali-related sales in the UAE have soared this year thanks to Indian tourists. Hotel bookings are already feeling the boost, although some operators say there is competition from Australia, where the ICC T20 World Cup is about to take place. Also, some Indian football fans will be heading to the UAE and Doha in November rather than now.
Even so, there are enough Indian tourists that the UAE’s gold trade has started to see more tourists in Deira Gold Souq and other jewellery hotspots. “Even though the Indian rupee recently surpassed Dh22 to Dh22, these tourists have enough buying power,” said a gold retailer. “They just have to look at the 15-18% price advantage of buying here.”
According to Avinash Adnani, Managing Director of Pluto Travels, “Diwali really lights up the Dubai/UAE tourism scene. With the first unlimited Diwali festival in 3 years, Indian tourists are flocking to Dubai like never before.
“The same fact is that Bur Dubai hotels are already fully booked in most preferred areas. Airfare prices are skyrocketing and local excursions are booked well in advance. This year’s most popular are the Museum of the Future, Garden of Miracles, Burj Khalifa, Waterworld Adventures theme parks and theme parks in Dubai Resorts.
On the other hand, overall travel costs in India have risen compared to previous years.
– Avinash Adnani, Pluto Travels
A couple’s packages cost $600 and more per person, excluding airfare, “nearly 20 percent higher than in previous years,” Adnani said. “However, this has not negatively affected the mood, and Dubai is about to have a bumper Diwali festival.”
Malls and outlets want to share that spirit too – and apparently so do UAE gold and jewellery retailers. The premise is that the price of gold remains at current levels and even falls further.
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