Though majority of women in the UAE prefer fashion over gold jewellery, many are still captivated by the lustre of the yellow metal.
Despite the bitter winds of global economic crisis, gold is still raining on Dubai, with retailers reporting rising sales. Just recently, the government-run luxury hotel, Emirates Palace, unveiled an ATM machine that dispenses small gold bars and coins, not paper bills.
According to the World Gold Council, the sentimental value of gold "sets it apart from the competing purchase choices, making it more desirable and long lasting" for many women.
Experts also consider gold an integral part of women's appearance and of their ability to look and feel good. But more than anything, it is the investment value of gold that makes it worth every dirham spent.
"It comes to mind what I said a few years ago: When my wife buys clothes, she spends money, but when she buys jewellery she saves money," recalls Rolf Schneebeli, chief executive officer of Joyalukkas.
That is why for Sharon Pereira, an expat from India, buying gold jewellery remains on top of her to-buy list."I'm not a fan of gold jewellery but I would purchase some while the rate is at its best and maybe at a later time sell it when the rate goes up. Hence [the choice is] purely for investment… If the income permits, I would indulge in different stones such as sapphire, corals and emeralds as they look absolutely stunning as opposed to plain yellow gold," she says.
Various aspects
Schneebeli says gold has various aspects that are appealing to women. First, gold is traditionally viewed as a store of value, a saving tool that will prove useful during a rainy day. This is the reason people gift gold on weddings, in the hope of providing safety to the couple for a long time to come.
"It is also the looks and the image that jewellery projects. There is nothing like a beautiful piece of jewellery — gold with diamonds or other stones-— to project an image. It's luxury, wealth, importance and individualism to the max. No shoe or bag would combine such an impression to the same extent while keeping value over time," Schneebeli adds.
However, the main barriers to buying gold are primarily financial. But such a limit is not in absolute but rather in percentage terms.
"A lady would be spending a certain part of the available money on necessities, another for discretionary spending and the remainder for savings. The discretionary category would include makeup, clothes and jewellery. Given the high price of gold, customers are looking for alternatives in this spot and buy more diamonds or precious stone jewellery."
"It is not only a financial restraint, it is also a substitution effect in favour of more fancy pieces with stones. But gold belongs also in the savings category and as such competes with bank deposits and stock portfolios. Here we would talk about bangles and similar pieces with limited value addition which are essentially the bank account on the wrist," he adds.
