Dubai: Gold prices under pressure, with returning tourists and Expo Dubai 2020 exerting its own influence – now is the right time for a jewelry retailer in the UAE. More so, if you are the only jewelry brand represented at the India Pavilion at Expo.
Yes, it all comes together for Malabar Gold & Diamonds, one of the main sponsors of the India pavilion, and Abdul Salam KP, vice president of the group, gives an overview of the trends that buyers and tourists of the UAE should search.
Dubai’s gold rate has slipped below Dh200 per gram for 22K – is this the most welcoming news for gold buyers – residents and tourists alike?
Abdul Salam: Certainly the Dh200 per gram and above was a mental barrier for buyers. Every time gold has fallen below Dh200 we have had buyers coming back. Now, if gold prices remain low – anything below Dh195 would be even better – the gold and jewelry industry can expect a significant increase in purchases, and especially with the return of buyers from the subcontinent.
Ticket prices from India to the United Arab Emirates are skyrocketing – easily over 100,000 rupees – and there are not enough seats available. If gold can be in the Dh190 range rather than Dh200 plus one gram per Diwali (November 4th), it will be a good end of the year.
For an Indian tourist, the additional 10% cost advantage will always be a deciding factor in buying here rather than at home.
Your best guess on where gold prices are likely to be?
AS: Most estimates suggest stability around $ 1,800 and above, which would mean that Dubai’s gold rate would be in the Dh205-Dh210 range. Over the past 22 months, gold has surprised everyone by sticking to these levels (and hitting an all-time high of $ 2,067 an ounce in August of last year). About $ 1,800 could be the new standard for gold.
Will resident buyers take time to accept these levels?
AS: As I said, there is a mental barrier to rates above 200 Dh per gram. But I don’t think UAE resident buyers stopped shopping because of the prices – 2020 was an outlier. Head to the Dubai Mall on the weekends and chances are you’ll have a hard time getting in. People want to go somewhere – and they want to shop. Luxury retailers are talking about almost empty stocks because there is such a demand.
And all this even before the tourist-shopper has yet made a significant comeback. With gold purchases, it’s a bit of a wait. But it has always been so with gold.
Why decide to have your Expo site store in the India pavilion? Was it because of the sponsorship?
AS: We wanted to present Malabar Gold & Diamonds as an Indian jeweler selling to an international audience. The Expo gives us the best platform.
There are some far-reaching changes happening in the gold and jewelry industry in India. Most recently, the government demanded that all gold sold in stores across the country be hallmarked. With just one move, the Indian government has increased the trust factor for Indian gold and jewelry. This is absolutely vital if Indian jewelry brands are to carve out a place in international markets.
This is what is happening now – this is what Indian jewelry has needed for too long.