Dubai Gold Souq feels pain of Air India AI 171 flight crash

Dubai: Sentiments at the Dubai Gold Souq are muted – and it’s not just about the record price of gold and the possibility the Dubai gold rate will inch closer to Dh390 a gram for 22K in the coming days. Even go all the way to Dh400.

The downbeat mood at the Souq is more from the devastating crash of an Air India flight minutes after it took off from Ahmedabad airport on Thursday last. For a majority of gold and diamond traders in the Dubai Gold Souq, Ahmedabad plays a central role in their sourcing operations.

“While a major part of our jewellery is sourced from Surat, it’s in Ahmedabad that most of the suppliers we deal have their headquarter operations,” said Abdul Salam K.P., Vice-Chairman of Malabar Gold & Diamonds. “Since the crash on Thursday, the gold trade here could feel the weight of the tragedy.

“There are staff at the various shops who hail from Gujarat, there are regular suppliers who come to visit the Gold Souq from Gujarat. The Dubai Gold Souq – and the entire UAE jewellery trade – is feeling the pain.”

Gujarat is a global hub for the cutting and polishing of diamonds, and as such has been a key supplier of jewellery that show up in the displays at gold retailers’ stores across the UAE.

Since last Thursday, gold retailers and traders say that the mood among their staff has been downbeat. "I know of at least 10-15 working at some of the Gold Souq stores who are in and around the area from Ahmedabad where the crash happened," said a bullion dealer. "Even if they knew no one on that flight, the crash is a personal tragedy."

Regular visitors to the Dubai Gold Souq will also have come across tourists who have come on group tours and walking in and out of the jewellery shops in the market. A good number of them typically are from Gujarat, and known to spend handsomely on gold during these visits.

“Buying gold from Dubai Gold Souq is a must for visitors on group tours,” said Anil Dhanak, Managing Director of Kanz Jewels. “Whatever the price, they would make that spend in Dubai on gold. They may go to all the other tourist locations in Dubai, but the Gold Souq remains a key part of their itinerary.”  

Industry sources say there have been some cancellations of group tours from India following the crash, especially those featuring a slightly older visitor profile.  

“We are expecting more cancellations now due to sentiments over the recent flight crash and also from the regional tensions,” said Salam. “It has been a tough few days.”