UAE gold shoppers still have an issue with gold rates above Dh200: Malabar Gold & Diamonds' Abdul Salam K.P.
Return of tourists will be biggest boost UAE's gold business can look forward to
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Dubai: Gold prices under pressure, tourists making a return, and the Expo Dubai 2020 exerting its own influence – this is a good time for a jewellery retailer in the UAE. More so, if you are the only jewellery brand represented at the India Pavilion at the Expo.
Yes, it’s all coming together for Malabar Gold & Diamonds, one of the prime sponsors of the India Pavilion, and giving an insight into what trends UAE’s shoppers and tourists should be looking out for is Abdul Salam K.P., Vice-Chairman at the Group.
The Dubai Gold Rate has slipped below Dh200 a gram for 22K – is this the most welcoming bit of news for gold buyers – resident and tourist?
Abdul Salam: True, the Dh200 a gram plus was a mental barrier for shoppers. Each time gold dropped below Dh200, we had shoppers returning. Now, if gold prices remain soft – anything under Dh195 would be even better – the gold and jewellery sector can expect a significant increase in buying, and especially with shoppers from the Subcontinent returning.
Ticket rates from India to the UAE are soaring – easily over Rs100,000 – and there aren’t enough seats available. If gold can be in the Dh190 range rather than Dh200 plus a gram by Diwali (on November 4), it’s going to be a good end of year.
For a tourist from India, the additional 10 per cent cost advantage will always be a factor in he or she buying here than back home.
Your best guess on where gold prices are likely to be?
AS: Most estimates suggest stability at around the $1,800 plus levels, which would mean the Dubai Gold Rate would be in the Dh205-Dh210 range. In the last 22 months, gold has surprised everyone by sticking to these levels (and hitting an all-time high of $2,067 an ounce in August last year). Around $1,800 could be the new normal for gold.
Will it take time for resident shoppers to accept those levels?
AS: As I said, there’s a mental barrier to rates above Dh200 a gram. But I don’t think UAE resident shoppers have stopped shopping because of pricing - 2020 was an outlier year. Head to The Dubai Mall on the weekends and chances are you will find it difficult to get into. People want to go somewhere – and they do want to shop. Luxury retailers are talking about their stocks running close to empty because there is such demand.
And all this even before the tourist-shopper is yet to make a sizeable return. With gold shopping, it’s a bit of wait-and-watch. But that’s how it has always been with gold.
Why decide to have your Expo site store within the India Pavilion? Was it because of the sponsorship?
AS: We wanted to present Malabar Gold & Diamonds as an Indian jeweller selling to an international audience. The Expo provides us with the best platform.
Some far-reaching changes are happening within India’s gold and jewellery sector. Just recently, the Government required that all gold sold in stores in the country should be hallmarked. In one move, the Indian Government raised the trust factor for Indian gold and jewellery. That’s absolutely vital if Indian jewellery brands are to make a cut in the international markets.
That’s happening now - this is what Indian jewellery needed for too long.
