When should Dubai shoppers start buying gold again?

How low should gold fall before shoppers head back to gold and jewellery stores in the UAE? Because right now, with gold still hovering above $1,900 an ounce – and Dh225 for a gram of 22K at Dubai Gold Rate – they are not in any rush.

Anil Dhanak of Kanz Jewels says that there are now 'To Let' signs showing up at the Gold Souq, which has never been the case through the last 30- or 40 years. There is a real concern that unless demand and tourists return to buying gold, it could get more dicey for retailers. And landlords too, by extension.

The shop windows at the Gold Souq are stacked with some of the most intricate jewellery designs... and quite a few straight-forward patterns too. All that they need now are shoppers to pick them up.

UAE jewellery retailers have ramped up health and safety measures to reassure shoppers about returning to the stores. Some are also deploying high-tech concepts such as Augmented Reality to give shoppers a feel of how a particular piece of jewellery will look on them. But most shoppers still prefer the old-fashioned touch-and-feel ways.

The Dubai Gold Souq is particularly dependent on the tourist-shopper, even accounting for more than 80 per cent of sales at some stores. But tourist shoppers are markedly absent until now, brought on by a combination of COVID-19 flight restrictions and gold prices remaining at near peak levels.

The COVID-19 has had an impact on gold on two fronts - at the local level, its impact on the economy and the wider society has run deep. Job losses and general uncertainty forced resident shoppers to bide their time over their next gold buys. And then there is the absence of tourist shoppers...

Jewellery retailers are hopeful that Diwali-related buying will happen to some degree. If that ensures a relatively upbeat November, it will provide retailers with some breathing space after a torrid 10 months. This year, Diwali is on November 14.

Once the Diwali buying is over, jewellery retailers will focus on the next big act in their calendar - end-of-season/holiday activity. If more flights resume and gold prices cool off just a bit, then December could provide another boost

Gold as an asset or fashion accessory... These days, it's more of the former. Will a Joe Biden victory in the US elections soothe gold prices further down from the current lofty heights?

Decision time... Shoppers will eventually return. But the 'when' is what retailers are fixated upon. Until then, they are letting their window displays and promotions do the talking.