Customers are seen shopping for jewelry at a store in Dubai. — Photo by Shihab
Despite the continuous rise in gold prices, jewelry sales in the UAE remained robust throughout October, a month that includes two significant festivals for Indian expatriates. Most retail outlets reported brisk business and increased foot traffic. Even with a 40% increase in gold prices during the current festive season of Dussehra and Diwali compared to 2023, traders anticipate a modest rise in sales value, despite a potential 20% drop in volume. Gold prices in the UAE reached an all-time high, with 24-carat gold selling at Dh330.5 per gram and 22-carat at Dh306. For 22-carat ornaments, which are popular among Indian expatriate buyers, the price has surged by Dh88 per gram or 40% compared to Dh218 a year ago.
Joy Alukkas, chairman of Alukkas Group, noted that Indians traditionally buy gold during Dussehra and Diwali as it symbolizes wealth and prosperity. Diwali will be celebrated on October 31, with the five-day festival starting on October 28 and ending on November 2. Alukkas observed a steady flow of buyers this year, despite the high prices. While customers may be purchasing less in quantity due to the record-high prices, they remain confident that their investment in gold during this auspicious time is both safe and rewarding. Alukkas, whose group operates 163 retail outlets globally, believes the outlook for gold is bullish, driven by increasing demand for safe-haven assets amid geopolitical uncertainties and falling interest rates.
K.P. Abdul Salam, vice-chairman of Malabar Gold and Diamonds, also noted that buyers are undeterred by the price spike. They remain enthusiastic but are purchasing in smaller quantities. For example, those who bought 20 grams last year may only afford 16 grams this year. Salam expects a 20% drop in quantity but predicts the season will end with a slightly higher value. Saxo Bank’s APAC Research Team highlighted that gold is setting new record highs, fueled by global demand for safe-haven assets and anticipated interest rate cuts from major central banks.
Analysts believe gold is on a steady climb to new highs, supported by domestic and international tensions. The Dubai gold trade is optimistic, with the Dubai Jewellery Group launching the “Shine Bright this Diwali with City of Gold” campaign, offering up to 50% off on select diamond and pearl jewelry collections. Leading retailers like Damas are also providing incentives such as free gold coins and gift coupons. Precious metals analysts attribute the all-time high gold prices to uncertainty in the Middle East, expected interest rate drops, and the US presidential election, which have driven investors to seek safe-haven assets. Central bank purchases of gold reserves and investor demand for portfolio diversification and hedging against global unrest also contribute to the surge.
Source link: https://www.khaleejtimes.com
