Dubai: Dhanteras, a Hindu festival, is considered the most auspicious day in the year to buy gold and it falls on October 25 (subject to change) this year. Diwali, which falls a day later, also marks an auspicious time for gold purchase for Indians who observe the festival.
Last year vs. Now
However, this year, gold prices made a jump of more than 20 per cent from prices in 2018. In August, suggested retail rates for selling gold in the UAE touched Dh173.75 a gram for 22K gold in the UAE - the highest in six years. 22K gold is the one most commonly used in retail jewellery while some jewellery brands also sell cheaper 18K gold jewellery pieces.
As of Tuesday, gold prices are at Dh169.25 for 22K gold. Prices have dropped by almost five dirhams (Dh4.50 to be exact) from its highest levels per gram of the precious metal, though the rates have been stable for the past couple of weeks hovering around Dh170.
Even after a drop of 2.7 per cent over the last couple of months, the price of Dh169.25 for a gram is a drastic increase from last year. The price of 24K gold was only around Dh149.25 per gram ahead of Diwali in 2018, compared to today's rate of Dh179.75 for a gram of 24K gold - a difference of more than Dh30 for one gram.
For jewellery purchases, the difference in prices then and now is easily over Dh200, for example a couple of small-earrings that weigh 8 grams in total.
Diwali, Dhanteras offers
For buyers set on buying gold for Diwali, jewellery brands in the UAE have special offers running.
For example, buyers can book purchases ahead of Dhanteras at the day's rate - which means you will be able to block the day's price. In this case, the buyer will not be affected by an increase in price on the day of purchase, but still can take benefit in case the price drops below the blocked rate.
For example, if you block your gold purchase today at Dh169.25, you will only have to pay that even if the price is higher on the day of purchase. Most brands ask for 10 per cent of the total expected purchase amount to book the deal.
Some stores are also offering free gold coins based on amounts purchased - usually a one or half-gram 22K gold coins for purchases above Dh3,000.
Gold exchange is also being encouraged by brands, with an offer of zero per cent deduction on value of old gold exchanged for new items.
Bargains are to be made on making charges as well - these are the design charges added to the gold rate when buying an item of jewellery. This charge is calculated a percentage of the weight price of gold and can go as high as 18 per cent on pieces with a lot of design work.
Smaller stores are offering discounts on this charge to make gold purchases more affordable ahead of Diwali.
A lot of banks collaborate with stores for special offers during Diwali. Contact the store or your bank to get details before making any purchases.
Tips when buying gold
Gold jewellery is many a times more than just accessories for an outfit in Indian families. Gold purchases are almost always also an investment. When buying god at high prices and in part as an investment for a rainy day - there are a few things to keep in mind.
Choose items with no stone-work or less stone-work.
Stones add to the weight of the jewellery during purchase which means you end up paying the gold rate for the stones as well. However, when you sell these items, stores will take off the stones and only consider the value of the actual gold in the piece.
Not all stone-work has this issue however, some stores consider stone-weight on buy back; always ask before buying.
Exchange offers
Ask if the stores will exchange the item later with no deduction - some brands offer zero deduction on exchange of jewellery from the same store. Just keep your bill to prove your purchase if you know you might exchange the piece later.
Designs
If buying for investment and hoping to also stay in budget, stay away from ornate designs. This will add up hundred of dirhams on making charges that you could have saved or bought more gold with.
A key example here are bangles, simpler designs always cost lower than ornate ones with the same weight.
18K gold
18K gold is not a great investment but is good for gold ornaments you tend to wear daily. There are also very cool and modern designs in these so are great for a spur-of-the-moment gold purchase that stays within your budget.
Investment only
If all you're looking for is investment and something small to park your money in — buy gold coins. They save on making charges and are easier to store and sell. One sovereign coin, eight grams, is a good start. Free making charges for coins usually start at this weight.
