Despite the high prices of gold, experts anticipate that sales of gold jewelry will maintain their robust upward trajectory during the forthcoming festive season. Major gold jewelers and analysts predict that gold prices will likely continue to rise due to geopolitical tensions, an uncertain economic outlook, and the potential for interest rate cuts by the US Federal Reserve in September. They believe that gold will persist in its upward trend due to the weakening US dollar and dovish signals from Federal Reserve Chair Jerome Powell.

Shamlal Ahamed, Managing Director for International Operations at Malabar Gold & Diamonds, highlighted that the surge in gold prices underscores the asset's value-appreciating nature and expressed optimism that record prices will not hinder jewelry sales during the festive season. "While the initial surge might cause some hesitation among customers, this is typically short-lived. Historically, gold prices have consistently risen, and customers tend to adjust to new pricing levels over time, recognizing its long-term value and reliability. We are expecting the festive season to boost jewelry sales, when customers typically focus on purchasing gifts for their loved ones and upholding traditions," Ahamed told BTR.

In response to a question, Ahamed noted that the first half of the year saw robust sales, driven by a combination of consumer confidence and the dual value of jewelry as both an adornment and investment. "We’ve also been seeing an increasing aspirational value for diamond jewelry as well. The upcoming six months are all about festivals, celebrations, and weddings when we anticipate greater momentum," he said. Ahamed added that consumers will benefit from enticing offers and exclusive collections, with jewelry continuing to serve as both a valuable investment and a key element of these special occasions.

John Paul Alukkas, Managing Director at Joyalukkas Group, opined that high prices make gold more attractive for consumers and investors, and the price rally is unlikely to dampen jewelry sales during the festive season ahead. "With gold prices hitting new highs, it’s no surprise that this makes gold even more attractive. This spike in prices actually highlights its timeless charm," Alukkas told BTR. "During the festive season, we will roll out many offers and promotions to keep gold jewelry both desirable and affordable, making it convenient for customers to purchase. In fact, gold and jewelry lovers consider it a win-win: they get to celebrate in style with the latest designs, and their investment remains as solid as ever." Alukkas emphasized that whether customers are shopping for a festive gift or treating themselves, Joyalukkas ensures that buyers get exceptional value and quality. The allure of gold, combined with exclusive festive offers, will certainly keep driving enthusiasm and sales during this vibrant season, he added.

Ahamed explained that gold prices in international markets are influenced by several key factors, including economic uncertainty, central bank policies, geopolitical tensions, and other unpredictable factors. "During these times, investors turn to gold as a safe-haven asset leading to increasing prices," he said. Gold prices have surged more than 21 percent this year and are now hovering above the $2,500 per-ounce psychological level, hitting a record high of $2,550 an ounce globally and Dh306.75 per gramme in Dubai in August. Analysts and gold jewelers expect further increases in prices in the coming days due to geopolitical tensions and expectations around the US Federal Reserve's decision to cut interest rates.

ANZ commodity strategist Soni Kumari said gold prices could reach $2,550 levels in the mid-longer term, but in the near-term, the market might look for an opportunity to correct. UBS analyst Giovanni Staunovo noted that the US Fed chairman strongly signaled the potential for US rate cuts, indicating that upcoming economic data would determine their pace and scale, which could boost gold investment demand. He added that demand for gold from central banks could also support prices. "Central banks' purchases are linked to a mandate to buy a specific amount of gold over a specific time frame... fears of sanctions, geopolitics, ballooning debts, are likely to keep demand from central banks supported despite record high prices, in my view," he said. Citi outlook stated that solid gold demand in the second half of the year could drive prices as high as $2,600 an ounce, with investors playing catch-up with the broader marketplace. "We remain constructive on gold physical uptake over the next 12 months with a potential Fed cutting cycle and US labor market headwinds buttressing paper demand for the yellow metal," the Citi analysts wrote. In this environment, the bank sees gold prices trading between $2,800 and $3,000 per ounce by mid-2025.