Dubai gold rate too high - this Eid Al Adha, will shoppers switch to diamonds?

Dubai: The UAE gold and jewellery promotions for Eid Al Adha launch on June 2 – but for now, shoppers don’t have much to cheer about when it comes to the price.

The Dubai gold rate is at Dh367.25 a gram – now, that’s a drop from the Dh374.75 for a gram of 22K on May 24.

But shoppers are more likely to look at the fact that the Dubai gold rate was at Dh356.5 as recently as on May 14. Now, that was seen as a ‘comfortable level’ to buy – and then hope for future price appreciation.

From the sales trends over the last 7-10 days, demand for gold has dropped considerably. Unless shoppers are planning to wait until Eid Al Adha next week, the trends point to buyers being unsure whether gold at these price levels make sense.

“There is a shopper resistance to price levels above the Dh365 levels, and when we do get shoppers now, their preference is for diamond jewellery, provided retailers offer price guarantee schemes,” said a jewellery retailer. “This Eid, there are some major discount schemes around diamond jewellery, and that too could be a reason for shoppers to consider a switch from gold.

“The fact remains that the prevailing gold price is seen as one level too high for shoppers unless they have special occasions.”

It will be difficult for shoppers in the UAE to miss the various promotions pushing hard on diamond collections. Every other billboard and social and media channels are showcasing the latest jewellery pieces - and most important, the seasonal offers that come with them.

It was more recently that the leading jewellers in the UAE backed their diamond sales with guarantees on prices and buybacks. (Shoppers must note to save those invoices for smoother processes when it comes to exchanging at a later date.)

"This year’s jewelry trends are all about delicate layers, mixed metals, and unique, personalized pieces," said Amreen Iqbal, founder of Piece of You. "It’s the season of effortless elegance and bold individuality."

So, will shoppers in the UAE be thinking diamonds over gold?