Manufacturers in the UAE are increasingly focusing on producing lightweight gold jewellery as the demand for such ornaments has surged due to record-high gold prices in Dubai. Industry executives report that jewellery weighing less than 15 grams is currently in high demand, as consumers are reluctant to stretch their budgets for heavier pieces. The surge in gold prices, which reached an all-time high of Dh322.75 per gram in Dubai, has notably impacted sales, particularly among investment buyers, especially those from Asia, who are currently holding back.
Gold prices have been on a steady rise over the past few months, influenced by expectations of further interest rate cuts, geopolitical tensions in the Middle East, and increased inflows into exchange-traded funds. Spot gold was trading at $2,664.68 per ounce, marking a 0.25 per cent increase. Tawfique Abdullah, chairman of Jawhara Jewellery, noted that the unprecedented rise in gold prices has significantly affected the market, with sales dropping by up to 15 per cent. He highlighted that the jewellery industry has seen a notable shift in terms of weight over the past decade, with manufacturers now focusing on lighter weight jewellery to meet consumer demand.
John Paul Alukkas, managing director of Joyalukkas Group, observed a significant increase in demand for lightweight gold jewellery in the UAE. He attributed this trend to customers seeking more affordable options as gold prices continue to climb. Manufacturers are responding to this demand by creating intricate designs that use less gold while maintaining high quality, balancing affordability with exquisite design. Alukkas noted that pieces in the 5 to 15-gram range are particularly popular, offering a balance between style, affordability, and sophistication.
Shamlal Ahamed, managing director for international operations at Malabar Gold and Diamonds, acknowledged that while high gold prices have impacted demand for lightweight jewellery, they also underscore gold's status as a value-appreciating asset. To assist customers during the festive season, Malabar Gold and Diamonds introduced a 'pay 10 per cent advance' offer, allowing customers to secure current gold prices with just a 10 per cent upfront payment. This initiative has benefited over 300,000 buyers, ensuring they can purchase jewellery at locked rates regardless of future price fluctuations.
