Dubai: With many of UAE’s expatriates and gold jewellery fans in India set to bring home gold this weekend, retailers are seeing an increase in sales and uptick in prices.
Some gold jewellery stores are getting some pre-orders of gold ornaments from Indian expatriates living in the UAE. Buying gold during the first day of Diwali, the Indian festival of lights, is deemed auspicious. This year’s Diwali falls this weekend.
Indians are the world’s biggest consumers of the precious metal, next to Chinese, accounting for 97.9 tonnes of gold jewellery -- 22 per cent of the world total-- during the second quarter of the year.
“We may see a little uptick in gold price due to customers expected to buy during the auspicious Indian festival of Diwali,” Karim Merchant, group CEO and managing director of Pure Gold Jewellers, told Gulf News.
“We have started seeing a lot of bookings. If all these materialize, we would expect gold jewellery sales to be higher between 20 per cent and 30 per cent compared to last month.”
When compared to last year’s Diwali, however, sales this year would be flat.Merchant said that customers are coming in with fixed budgets.
“[They’re] looking to maximise value, hence we see a lot of lightweight pieces moving well in addition to collections on offer.”
Retail gold prices have been inching up this week. As of 10.30am on Wednesday, 24 karat was retailing at Dh154.50 per gram, up from Dh154.25 a day earlier.
Merchant said he expects gold to be range-bound at between $1,250 and $1,300 per ounce over the next few weeks, adding that the impact of Diwali gold buying on prices would only be minimal.
Gold prices are still facing pressure from the strong US dollar and growing expectations of a rate increase in the United States. Other experts are also pointing to growing concern about inflation in the US and the return of safe-haven demand.
Overall jewellery demand in the Indian community has also been quite subdued this year, with jewellery consumption posting a 20 per cent year-on-year decline in June despite a brief boost to demand during Akshaya Tritiya, another Indian festival linked to gold jewellery purchase.
“The high and volatile price of gold has hit jewellery consumers across the globe. Coming at a time when consumer confidence is at low levels in many markets has exacerbated its impact,” the Wold Gold Council said in its report.
“The market faced three key issues: a sharp jump in the gold price, weaker rural incomes [and] government regulation.”
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