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UAE experts advocate better marketing to boost gold sales
Experts from the fin-ancial and commodity trading sectors urged Dubai's gold traders to make a united effort to drum up the marketing of gold jewellery to encourage more consumer interest amid rising prices.
- By Cleofe Maceda, Staff Reporter
- Published: 00:08 April 14, 2008
Dubai: Experts from the financial and commodity trading sectors urged Dubai's gold traders to make a united effort to drum up the marketing of gold jewellery to encourage more consumer interest amid rising prices.
Some experts, however, predicted gold prices will stabilise at $850 to $950 in a year.
Speaking at the 6th Dubai City of Gold Conference, Moaz Barakat, managing director for Middle East, Turkey and Pakistan, World Gold Council, said jewellers should undertake aggressive and creative marketing, product development and innovation, to secure better margins.
"We are facing a challenging period. Gold prices are going up at a level that we haven't seen before. We have to be more creative and effective than ever before. We have to try to understand consumer behaviour," Barakat said.
Paul Walker, CEO of precious metals consultancy GFMS, said jewellery is a prime driver of gold price. He pointed out that jewellery sustained the gold market in 2007, when prices were stuck in a range of $610 to $690 between January and August.
"It is the people's willingness to buy jewellery that gave a solid floor to the price. They've taken the view that buying into the gold brand image or buying gold jewellery [is beneficial], for the simple reason that they believe the price is going up. It has a brand value," said Walker.
However, Kelvin Williams, retired executive director of AngloGold Ashanti, cautioned against ignoring the impact of the economic crunch on investor interest in gold.
"A weakening dollar and a general price rise in commodities has been influential on interest in gold. We must expect investor and speculator interest in gold to change. One of the primary drawbacks is that it is a two-way market," Williams added.
Tawhid Abdullah, managing director of the Dubai Gold and Jewellery Group, urged gold retailers to learn from the flexibility, marketing acumen and unity that the watch industry has displayed in moving to the forefront of retail and fashion.
According to Bijou Kurien, lifestyle division chief executive of Indian's Reliance Retail, organised jewellery retail in India now stands at four per cent, with the unbranded market worth $14 billion.
James Steel, chief commodities analyst of HSBC Bank, said that de-pegging currencies from the dollar will not bring down gold prices.
"If it's not the dollar, it would be the euro. Then gold will trade inversely with the euro and for prices to come down, the euro will have to be strong. Presently, commodity prices are strong, favouring gold. This is a break from earlier credit crunches in which commodity prices slumped with the dollar."
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