Dubai: The current softness in gold prices could prove a windfall for Dubai’s jewellery business and shoppers during DSF 2014.
For the first time since 2006-07, the Dubai Gold and Jewellery Group is offering one kilo of gold each day as a raffle prize over the month-long campaign as against the 500-grams that was on offer for DSF 2013. (There was also a one-off 5-kilo grand raffle which has been done away with for DSF 2014.)
For shoppers, the higher stakes that a 1-kilo daily raffle has to offer, plus the softening gold price, could be enough to convince them to indulge in some serious buys from January 2.
“With gold now at slightly over the $1,200 an ounce mark, a 1-kilo daily draw does not represent as heavy a cost burden for the Group as might have been the case in recent years,” said Joy Alukkas, chairman of Joyalukkas Group. “Even in the last seven days, gold slipped by $50 or so and it does seem that $1,200 could be the new base level.”
Incidentally, gold was going for $552 an ounce in 2006 when the 1-kilo daily raffle was first instituted.
The upcoming DSF could also pull in a higher number of visitors from the Subcontinent, or at least that is what the Gold and Jewellery Group is hoping for. If a shopper from India were to buy here, they immediately benefit by a margin of 10 per cent which is the import duty charged on bullion in that country. Plus there are the value-added taxes that each state in India imposes. (In fact, this has led to a spurt in gold smuggling, with major seizures being reported from all the main airports in the country, often on a weekly basis.)
“There is a lot more clarity on what an Indian can bring in as jewellery into the country from abroad — it is up to Rs100,000 in jewellery value for a woman and Rs50,000 for a man,” said Alukkas. “DSF 2014 would be the first platform to see how much of a demand the jewellery trade can generate from visitors coming from India, and who can circumvent the mandatory 10 per cent higher cost if they were to buy the same in India.”
With last week’s drop in gold values, there was a corresponding increase in shopper traffic at local jewellery stores, say market sources. “But the pent-up buying should start January 2 and this is where the incentive of a 1-kilo can come in handy to draw in major transactions,” said Abdul Salam K.P., group executive director at Malabar Gold & Diamonds. “The 1,200 an ounce level is something that lots of shoppers would be comfortable with.
“Given that we expect significant visitor numbers from the Subcontinent, our focus for DSF 2014 would be on 22-karat jewellery, while at select locations such as Deira City Centre, it would be on 18-karat and diamond jewellery because it’s a more diverse mix of shoppers that frequent these outlets.”
