Dubai: For the first time, UAE’s jewellery retailers are using more of online portals to get people to buy gold on “Akshaya Trithiya”, the Indian festival when buying assets, especially the yellow metal, is deemed auspicious.
They will also have a few hours of brick-and-mortar retailing - between 12pm to 9pm - to try and convince shoppers, now that the Government has allowed retail businesses to open, though with reduced operating hours and strict limits on the number of shoppers that they can serve within these outlets at any one time.
The likes of Malabar Gold & Diamonds and Joyalukkas are running online bookings, with deliveries scheduled as soon as business activity returns to normal after the one-month restrictions. Akshaya Trithiya remains one of the key selling days in the first-half of a key for jewellery retailers.
But online channels and stores opening only solve part of the issue jewellery retailers need to tackle - bullion prices are now at $1,729 an ounce, only slightly short of the $1,756 it touched on April 14 and which was the highest point so far this year. (And these are also the highest levels gold has touched in seven years.) That means the Dubai Gold Rate for 22K is Dh196.75 a gram. Add in the 5 per cent VAT on each gram (Dh9.83), and the price of gold will hit the budgets of most shoppers. More so at this time as a good number of Indian expats are grappling with job losses or steep salary reductions after the COVID-19 hit slowdown.
‘Look at it another way’
But gold retailers are telling their shoppers to look at the current prices in another way. “Gold is the only asset that has seen a 35 per cent increase in the last 12 months,” said Shamlal Ahamed, Managing Director - International Operations at Malabar Gold & Diamonds. “All other assets - stocks, currency, - have declined.
“The consistent performance of gold as a performing - and moveable - asset will help retain its place as a preferred asset.”
There may a few shoppers willing to buy gold today (on Akshaya Trithiya) because, one, it’s auspicious to do so and, two, because they think gold’s going to go higher in the coming months.
But there’s no denying the two-way impact of high gold prices and job uncertainty would have on demand. Even remittances to India are down drastically, despite exchange rates now at lows of 20.65 to a dirham.
“There may a few shoppers willing to buy gold today (on Akshaya Trithiya) because, one, it’s auspicious to do so and, two, because they think gold’s going to go higher in the coming months,” said Cyriac Varghese, General Manager at Sky Jewellery.
“But paying seven-year high prices for gold purchases now will force many shoppers to give it a miss. It will take time to adjust to [gold] shopping after COVID-19.
The World Gold Council will be releasing the first-quarter gold and jewellery consumption numbers worldwide this Thursday. That will provide a good enough indication of what consumers are thinking.
For now, UAE’s jewellery retailers are hoping a few will have made up their mind to buy before 9pm today.