Dubai: With gold prices remaining steadfastly at their peak, Dubai's jewellery retailers are giving one last promotional push to get buyers into the shops. This coincides with next week's Diwali celebrations, the Indian festival when jewellery sales have traditionally received a boost.
"Demand usually peaks on Dhanteras, the first day of the festival — this year is not going to be an exception," said Firoz Merchant, chairman of Pure Gold.
Another retailer, Damas, has brought out collections for Diwali priced from Dh1,990 to Dh19,990 and backed up by gifts with each purchase of starting from Dh500. The campaign, which runs until Sunday, is also offering buyers payment plans through banks at zero per cent interest over six months.
"We have specially designed diamond, gold and pearl collections in addition to a variety of other ethnically attractive creations," said Dhanji Dedhia, Marketing Director, Damas Jewellery. If sales picks up in the coming weeks, Dubai jewellery retailers are also hoping to make up for a less than robust third-quarter performance.
"In the Middle East, anecdotal evidence suggests that jewellery demand softened during third quarter 2010 on the back of the seasonal effect of Ramadan falling in August coupled with higher price levels thereafter," said a recent report issued by the World Gold Council.
Much of it, industry observers said, had to do with gold prices during the period. At one point in time, it did seem the metal was breaching new peaks every other week.
But that does not necessarily mean buyers are completely put off from buying jewellery. "In tougher times we are not seeing declining interest in jewellery, but there has been a change in values and expectations," said a study jointly commissioned by WGC and AU Finja, the jeweller.
"Traditional values still hold to some extent, but the role of precious jewellery has evolved — for regular wear and festive gifts, consumers prefer bigger trendier collections that were at the same time lightweight."
Seasonal demand
The study added: "Gold remains one of the most preferred purchases for the season, both for self and as gifts and therefore, we expect this to reflect in consumer demand levels."
Local jewellers are also keeping a close eye on demand in India during Diwali. An upbeat sentiment in India could end up reflecting on buying patterns here, is how they see it.
The impression is that during the first-half of the third quarter, "robust" sales were recorded in both the rural and urban markets in that country, according to WGC.
Even then, "With prices staying above the Rs1,775 [Dh144] a gramme level for most of the third quarter, jewellery sales seem to have contracted in September," the WGC report added. "WGC expects demand to pick-up further in the fourth quarter with the commencement of the main festive season from early October until November."
And the time may have come for jewellery buyers to live with the fact that gold prices are not going to retreat all of a sudden. I do not believe the current level of $1,350 [Dh4,956] an ounce is deterring people from purchasing jewellery," said Merchant. "I expect prices to reach even higher levels, my prediction is $1,500 by the end of the year."
