Dubai: UAE’s gold and jewellery market is heading into the busiest 10 days this quarter, with shoppers hoping to take advantage of bullion prices latest drop ahead of Diwali on October 24.
At today’s UAE gold rate of Dh187.75 for a gram of 22K, resident shoppers have a Dh16.5 advantage over the same Diwali period last year, when it was at Dh204.25. And if comparisons are drawn with the 2020 gold price during Diwali, the advantage for shoppers work out to an even heftier Dh27.75, when the then price was at Dh215.50. (If they look at 2019 Diwali prior gold price, there will be a tinge of disappointment, when the UAE gold rate was at Dh172.25 a gram.) “There are some favourable indications that gold could drop further when the bullion markets open Monday, from the current $1,644 an ounce,” said a jewellery retailer. “If the UAE gold rate then declines under Dh185, the trade here is looking for a sales sparkle with Diwali buying.
“Going by yesterday evening’s (October 14) trends, we had been hoping gold to slip below $1,640 levels. That didn’t happen, but Monday looks hopeful.” (The Indian festival of Diwali is rated an opportune moment for gold and diamond purchases, and represent a peak buying period for the UAE gold retail market. The other Indian festival related buying happens during ‘Akshaya Trithiya’.) According to Anil Dhanak, Managing Director of Kanz Jewels, “As always, we are seeing increased interest in gold and jewellery buying during the festive season. Yes, this year we are expecting an additional boost as gold prices are at the lowest range this year.”
Our customers are seeing this auspicious season of buying as the perfect moment to capitalise on the lower prices.
– Anil Dhanak of Kanz Jewels
By now, most gold buyers in the UAE are aware of how to go about making their next purchase during times of price volatility. All that they need to do once they have made up their mind to buy is waiting for a price they feel comfortable with, and then make a booking at that rate and pay a 5-10 per cent down payment. Then, all they need to do is select the date for the actual buy – if gold prices slip further, they benefit. And if prices were to rise from the levels they booked, they still benefit from the lock-in.
“In the last two months, when gold priced had dropped to three-year lows, nearly 50 per cent of our shoppers went online to lock in their rates,” said a jeweller. “These are not millennial or Gen-Z shoppers, but these shoppers understand how to get the best prices.” (Retailers are also offering cash-back schemes and bringing down the making charges for Diwali.)
Indian tourists too
This year, UAE’s Diwali-related sales are in for a significant boost through tourists from India. Hotel bookings have already felt the lift, though some operators say there is competition from Australia, where the ICC T20 World Cup is all set to blitz away. Also, there are Indian football fans who will be travelling to the UAE and Doha in November rather than now.
Even then, the Indian tourist numbers are still substantial enough, and UAE’s gold trade has started seeing more of them at the Deira Gold Souq and other jewellery hotspots. “Even with the Indian rupee going past Dh22 to the dirham recently, these tourists carry enough purchasing power,” said one gold retailer. “They only have to look at the 15-18 per cent price advantage from buying here.”
According to Avinash Adnani, Managing Director of Pluto Travels, “Diwali has literally lit up the Dubai/UAE travel scene. With the first Diwali in 3 years with no restrictions, the Indian traveller is thronging to Dubai like never before.
“The same is evident from the fact that most of the Bur Dubai hotels, which is a preferred area, are already booked out. The airfares are rocketing and the local excursions are booked in advance. This year’s hot favourites are Museum Of Future, Miracle Garden, Burj Khalifa, Aquaventure and theme parks at Dubai resorts.
On the other side, the overall cost of travel from India compared to previous years has risen.
– Avinash Adnani of Pluto Travels
A package for a couple is costing $600 and over per person, excluding the airfare, ‘which is higher by almost 20 per cent compared to previous years,” said Adnani. “This has however not put dampener on the spirits and Dubai is up for a bumper Diwali.”
The malls and outlets too would be hoping to share in that spirit – and obviously, so would the gold and jewellery retailers in the UAE. Provided gold prices remain at current levels, or even drop further.