Advance booking cushions gold’s ‘price shock’
THE YELLOW METAL SHOT UP DH5 A GRAM ON INDIAN FESTIVAL OF AKSHAYA TRITIYA
UAE gold shoppers who booked their ‘Akshaya Tritiya’ purchases in advance found themselves better off after the local gold rate surged by Dh5 a gram on the day. The UAE gold rate for 22 carat rose to Dh264, after bullion prices surged by $50 plus to $2,358 an ounce overnight. (One troy ounce equates to 31 grams.)
“It’s quite a price shock shoppers got on Akshaya Tritiya this year. No one saw the $50 overnight price surge coming,” said Abdul Salam K.P., vice-chairman of Malabar Gold & Diamonds, which had opened its price lock-in schemes for Akshaya Tritiya from March 1.
Spurring sales
“All those who booked got to maintain the Dh258/Dh259 they booked at in recent days. Fortunately, a lot of UAE shoppers did book in advance and locked in their purchase prices before the hike.”
This is the same picture other leading UAE jewellers provide. Akshaya Tritiya is an Indian festival where buying gold or other assets is one of the key highlights. In the UAE, gold retail sales on the day accounts for 1 tonne or more.
After the first hour of opening, UAE jewellers said the early shoppers were primarily those who made advance bookings. Anil Dhanak, managing director of Kanz Jewels, said, “Whatever the price levels, gold buying during Akshaya Trithiya remains a significant cultural event.”
UAE jewellery retailers have only begun promoting price lock-in schemes in the last two years, allowing shoppers to book at a specific gold price and complete their purchase within 30 days. This protects them from price hikes while still enabling them to benefit if prices decrease.
It’s quite a price shock shoppers got on Akshaya Tritiya this year. No one saw the $50 overnight price surge coming.”
Abdul Salam K.P. | Vice-chairman of Malabar Gold & Diamonds