Stock Gold souq Deira
Gold prices are dropping - and it is time for shoppers to cash in. But, should they buy immediately or wait? Image Credit: Ahmed Ramzan/Gulf News

Dubai: The Dubai Gold Rate has dropped to Dh213.75 a gram – and could slip further – ahead of what will be a crucial 10 days for jewellery sales in the UAE. During this period, shoppers will be asking themselves one question – should they buy now or book?

Gold industry sources are hopeful that gold prices could slip to $1,860-$1,870 an ounce levels from the current $1,883. In the last 48 hours, gold slipped below $1,900 after spending the better part of April seemingly ready to go past $2,000 for a second straight month. On April 18, the Dubai Gold Rate was at Dh226.75 a gram, when international bullion price was at $1,978 an ounce.

Shoppers in the UAE are responding to gold’s slip – with a surge in bookings. “The plan is to lock-in at current levels and in the hope that prices will drop further over the next few days,” said Abdul Salam K. P. Vice-Chairman of Malabar Gold & Diamonds and member of the board at Dubai Gold & Jewellery Group.

By locking in, shoppers are giving a firm commitment of making a purchase, and if prices drop further, they get the benefit of that price rather than the current one. And if prices do go higher than current levels, they still get to buy at the lower rate.

“What we have seen from 2021 and Q1-22 buying patterns, shoppers are comfortable with Dubai Gold Rate at Dh205-Dh210 a gram. Shoppers and retailers will be hoping that the current price drop will extend to below Dh210.”

Setting up a strong ‘Akshaya Trithiya’

May 3 is when Indians mark ‘Akshaya Trithiya’ this year, and when buying gold is rated as an auspicious ritual. Through the years, that particular day has emerged as one of the high points for gold and jewellery sales. This year, apart from price lock-ins, retailers are offering free gold coins if a shopper’s purchase crosses pre-set levels.

“Gold’s drop this week potentially sets up a strong Akshaya Trithiya demand – another two to three days of weak bullion prices will be enough for that,” said a retailer. “March and April sales were weak, with gold sticking to $1,900 and over. This is a chance for shoppers to cash in on the drop.”

Diamonds vie for attention this Eid

Ahead of that, there will also be the Eid shopping, and shoppers could be in the market for a few diamond purchases as well. Retailers are already promoting some heavy offers on their diamond collections, with straight discounts on making charges. Some are going that extra distance, with Bafleh Jewellery offering a ‘100 per cent cashback’ raffle on diamond jewellery purchases.

Stock - Diamond Jewellery (Bafleh)
While gold prices are in reset, UAE jewellers are scaling up their promotions on diamonds. There are outright price discounts, cuts on making charges, and even 100% cashback offer. The last one is from Bafleh Jewellery, where a raffle draw would pick up the winner. Image Credit: Supplied

On Thursday, World Gold Council reported that the UAE gold jewellery sales had its best quarter during January to March since Q2-2017. For the better part of the first quarter, gold was under $1,900 and that pulled in a lot of demand from tourists.

Retailers say that it wasn’t just tourist buying, and that UAE residents chipped in handsomely, and more so during a phase in January when prices dropped to $1,789. “The ‘buying the dip’ mindset has taken hold among UAE gold shoppers,” said a retailer. “Now seems a good time to make a return to buying.”

We are having the 100% cashback only on the diamond jewellery selections - that's because we believe diamonds are trending more than gold with shoppers right now

- Arti Vora of Bafleh Jewellers