Dubai's Diwali shoppers weigh tradition against gold's record highs

With gold hitting successive all-time highs in recent weeks, Dubai’s Diwali shoppers may well be wondering if they should wait to buy the inevitable dip even if that means avoiding auspicious purchase days such as Dhanteras. The festival, which kicks off the five-day Diwali season, is traditionally believed to attract wealth and prosperity.

“We see Diwali as a time when customer sentiment and cultural tradition really drive the market. Instead of focusing on the economic ups and downs, we’re looking at how Diwali traditionally boosts consumer enthusiasm for gold buying. People are naturally inclined to purchase jewellery during this festival, and that tradition sets the tone more than anything else,” says Rashid Al Harmoodi, Senior Director of Property Management at Ithra Dubai, which manages the new Dubai Gold Souk Extension.

Financial analysts expect gold to reach between $4,488 (Dh16,482) and $5,000 an ounce in 2026 – an increase of between 10 and 20 per cent from current highs. “This rally has legs in our view, but a near-term correction would be healthier for a longer-term uptrend,” Suki Cooper, global head, commodities research at Standard Chartered Bank, told Reuters.

Bullion has climbed 56 per cent so far this year, on the back of geopolitical risks, central bank buying, strong inflows into gold funds and deepening expectations of looser US monetary policy, the wire agency reported. And global gold ETF holdings rising from 3,616 tonnes in Q2 2025 to 3,692 tonnes in Q3 2025, according to the World Gold Council.

Certainly, jewellers are happy to emphasise the strength of gold as an investment – although jewellery is typically more expensive than bullion, because of design and making charges, which consumers don’t get back when they return to resell it.

“Over the years, gold has consistently proven its strength,” says Vinay Jethwani, Partner and Meena Jewellers, which retails a broad range of gold and gem-set designs. “Every high becomes the new normal. What seems expensive today soon feels routine, as customers quickly adapt to new price levels. Gold is a powerful investment that grows with time,” he says. “To make this festive season even more special, we’re offering no making charges on selected coins and jewellery,” he adds.

Muneer Thangals, Chairman of Thangals Group, says gold’s steady rise has only strengthened consumer trust in it as a secure investment. “Over the last two years, we’ve seen prices climb consistently, driven by global uncertainty and strong demand,” he says. “Gold remains one of the most reliable ways to preserve value, and this festive season is an ideal time to buy smart.”

He adds that Thangals Jewellery is offering Dhanteras and Diwali promotions across its UAE showrooms, including 8-gram gold coins without making charges. “Customers can also exchange old gold for new designs, making the most of their earlier investments,” he says. “Beyond gold, our diamond and polki collections continue to attract buyers who appreciate jewellery as both beauty and legacy.”

He’s among a broad range of goldsmiths who are responding to price highs with price incentives and generally reassuring buyers against future downsides this Diwali, traditionally the strongest period for gold sales.

The success of the season, then, may hinge less on gold’s headline price and more on trust, skin in the game, and clever marketing. “It’s all about making the buying experience a little more rewarding during the festive season,” Al Harmoodi explains.

Malabar Gold and Diamonds, for example, is rolling out a scheme that enables shoppers to pay a 10 per cent advance to lock in current rates across festive collections such as its Vyana signature gemstone jewellery and its Nuwa natural diamond line. “If prices increase during purchase, they can avail the blocked rate and if prices drop, they can draw mileage from the lower rate,” says Shamlal Ahamed, MD-International Operations, Malabar Gold and Diamonds. The offer also includes free vouchers and zero deductions on 22-carat (22k) gold exchanges, all until October 19.

Over at Bafleh Jewellers, buyers benefit from competitive buyback on gold at the day’s rate, attractive exchange terms with a portion of making charges being offset and upgrade options so consumers can trade in older designs at favourable exchange rates. “Over time, this helps recover a significant part of making costs,” MD Chirag Vora says. The company offers both bullion and jewellery, including popular gold coins such as options the American Eagle, Canadian Maple Leaf and South African Krugerrand, gold bars in sizes ranging from 1g to 1kg, and an inventory of jewellery such ranging from 18k to 22k.

But not every retailer emphasises incentives. At La Marquise, CEO Nishith Shah, argues for a more timeless positioning: “Gold prices may be at an all-time high, but buying gold especially in the form of exquisite jewellery is never about short-term gains,” he says. “We view gold and diamonds as long-term investments and timeless heirlooms.” The company focuses on ornaments rather than offering gold coins or bars. “We transform gold into expressions of art that can be worn. Gold is not meant to sit in a safe.”

Kanz Jewellers takes a more philosophical spin: “We believe that gold is never expensive, it’s eternal. Jewellery is wearable wealth. While making charges represent the craftsmanship, the true value lies in its beauty and longevity,” Arjun Dhanak, Director at Kanz Jewels told Friday. “Price fluctuations come and go, but the value of gold remains steadfast. Today’s price will look reasonable tomorrow — because gold has always proven to move forward, not backward.” Kanz offers an extensive selection of 24K gold coins, investment bars, and custom coins with options for corporate and festive gifting, as well as fine jewellery and diamond sets.

JoyAlukkas, for its part, leans on value and volume. “Buying gold now isn’t about timing the market - it’s about long-term security and emotional significance,” a spokesperson told Friday. “When you buy gold today, you’re preserving value for the future, while being part of a timeless tradition across generations.” The long-established retailer offers an extensive range of 22k and 24k gold jewellery and coins and bars weights ranging from 1g to 100g. It’s all bolstered with flexible promotions like zero making charges on select coins and lifetime exchange options, hoping to straddle the line between investment and ornament.

Even as jewellers roll out incentives, hurdles remain. Best-in-class “making charges” can amount to 5-15 per cent or more. These are typically unrecoverable on resale. Retailers often compete to outdo each other on much to absorb or share, and many will bargain to make a sale. On Reddit, users discuss the risk of scams or impurity, so it’s advisable to insist on gold that is hallmarked with a Bareeq certification.

“Some things never change - customers across nationalities look for transparency, value for money and wide options,” says Aditya Singh, Head - International Business, at Titan, the parent company for Tanishq, perhaps the largest Indian jewellery brand.

He says customers are expecting the best exchange value as prices soar higher. “Buyers are quite intelligent and have a good sense of shopping between deals and designs. While the wider economic climate have a lot of uncertainties, Diwali season is expected to be good.”

But buyers should also think carefully before buying gold as an investment when prices are so high. Many experts also see the precious metal declining in value. Willem Buiter, former member of the Bank of England’s Monetary Policy Committee, warned that we could be seeing a gold bubble, urging central banks to sell their holdings. With the high prices, its true value is “virtually non-existent,” he told the Financial Times.

Perhaps the best advice is to take a long-term view, rather than trying to time the market, i.e. predicting price movements to buy low and sell high. As investment firm Charles Schwab put it in a 2023 research note, “Research shows that the cost of waiting for the perfect moment to invest typically exceeds the benefit of even perfect timing…The best strategy for most of us is not to try to market-time at all. Instead, make a plan and invest as soon as possible.”

Vijay Valechha, CIO, Century Financial crunches the numbers for Friday. “Assuming a household buys gold two weeks before Diwali and forgets about it, this strategy would have yielded approximately 10,245 per cent since 2000,” he says.