Diwali comes early
dubai — Jewellery retailers in the UAE are optimistic that the recent drop in gold prices will spur their sales in the ongoing festive season. After a strong start in the second quarter, they are confident that the fast approaching Diwali, also known as festival of lights, will trigger a momentum in gold sales.
Gold prices have declined almost five per cent since early September, when it hit Dh4,986 per ounce, the highest since August last year. Spot gold was Dh4,754 an ounce on Thursday after hitting two-month low at Dh4,628 per ounce on October 6. On Thursday, one gramme of 24-carat gold was at Dh157 from Dh160.50 per gramme just a month ago in the UAE.
“We are hopeful that the festive season will trigger momentum in sales and there will be an uptick,” T.S. Kalayanaraman, chairman and managaing director of Kalyan Jewellers, said.
Karim Merchant, managing director and CEO of Pure Gold Jewellers, said: “We have seen an uptake in gold jewellery sales since the prices have softened. Customers are always looking for price opportunities to buy more gold.”
Analysts forecast that gold prices will remain between $1,250 and 1,300 per ounce in the near term. It means the current prices have provided an opportunity for buyers, especially for a large of number of Indian expats, one of the largest gold consumers with a 24 per cent share of total demand.
“The price of gold tends to be negatively correlated with the external value of the US dollar. The US dollar does not have much cause to weaken further, especially as the Fed will likely lift the federal funds rate in December, the immediate impulse for the gold price is neutral unless geopolitical risk is heightened. Near term, a price range of $1,250/oz to $1,300/oz seems reasonable, unless the lower limit is broken on the down-side,”
Since gold prices have dropped, we expect to see a sizeable jump in sales of gold, diamond jewellery Joy Alukkas, Chairman and managing director of Joyalukkas
The drop in gold prices, along with Diwali, helped us to achieve this positive trend Shamlal Ahamed M.P., Managing director for int’l operations at Malabar Gold & Diamonds
Davis Hall, global head of Forex and precious metals, Indosuez Wealth Management, said.
Ujjal Deb Roy, Manager, Investment Research & Analytics, Aranca, said that September onward markets usually witness a seasonal increase in gold purchase due to festive demand. “We believe the recent correction of ~4 per cent in gold prices since last month could further fuel this demand in the near term towards the end of 2017,” he said.
As the Diwali festival is nearing, top retailers in the UAE, including Malabar Gold and Diamonds, Joyalukkas, Kalyan Jewellers, Pure Gold Jewellers and Bafleh Jewellery and, etc. have announced promotion campaigns to attract customers. They came up with heavy discounts on making charges, free gold coins and hundreds of kilogrammes in prizes during the season.
For Indians, buying gold at Diwali is considered auspicious and thought to bring good fortune and prosperity. “I will buy bangles for me and a jew-
The festive season will trigger momentum in sales and there will be an uptick TS Kalayanaraman, chairman and managing director, Kalyan Jewellers
ellery set for my cousin, who is living in India. Right now I am comparing all the promotions offered by the jewellers. I’ll pick the best offer. I will buy on Dhanteras, two days before the Diwali festival, on October 17,” Reema Ramesh, an account executive in a Dubai firm, told Khaleej Times. Dhanteras marks the beginning of the Diwali festival. Gold and
We have seen an uptake in gold jewellery sales since the prices have softened Karim Merchant, Managing director and CEO of Pure Gold Jewellers
jewellery sale in the UAE jumped nine per cent in the second quarter of 2017 as compared to the same period last year, according to a World Gold Council data.
UAE consumer sales rose from 12.6 tonnes in Q2 2016 to 13.6 tonnes during the April-June period of this year, an increase of nine per cent. While jewellery demand rose similar percentage from 11.2 tonnes in Q2 2016 to 12.2 tonnes in Q2 2017. Joy Alukkas, chairman and MD, Joyalukkas Group, said since July this year, UAE retailers have benefited from an influx of Indian buyers who are taking advantage of the approximately 13 per cent difference in prices since India implemented GST across the country.
“This upsurge is expected until early next year, and along with the coming festive season, since the gold prices have also dropped, we expect to see a sizeable jump in sales of gold and diamond jewellery,” he said. “We have seen a positive trend in jewellery sales in October. Recent drop in gold price along with the starting of Diwali has helped us to achieve this positive trend,” echoing the sentiments Shamlal Ahamed MP, managing director -International Operations, Malabar Gold & Diamonds, said.
Chirag Vora, managing director of Bafleh Jewellery, was also upbeat on the trend: “Yes we are seeing a reasonable increase in sales of gold jewellery.”
riaz@khaleejtimes.com