Will gold buyers in the UAE benefit from another price cut ahead of Diwali on October 24?


Dubai: The UAE gold and jewelry market is heading for the busiest 10 days this quarter as buyers hope to take advantage of the latest drop in bullion prices ahead of Diwali on October 24.

At the current UAE gold price of Dh187.75 for a 22K gram, resident buyers have an advantage of Dh16.5 compared to the same Diwali period last year when it was at 204.25 MAD. And if comparisons are made with the price of gold 2020 during Diwali, the advantage for buyers is even higher at 27.75 Dh, while the price then was 215.50 Dh. (If they look at the price of gold before Diwali 2019, there will be a hint of disappointment, when the UAE gold rate was at Dh172.25 per gram.) “There are favorable indications that gold could fall further when gold markets open on Monday, from the current price of $1,644 an ounce,” a jewelry retailer said. “If the UAE gold rate then drops below Dh185, the trade here is looking for a selling spark with Diwali buying.

“Based on trends from last night (October 14), we were hoping for gold to slip below the $1,640 levels. That didn’t happen, but Monday looks hopeful. (The Indian Festival of Diwali is considered an opportune time for gold and diamond purchases, and represents a peak buying period for the retail gold market in the UAE.The other buying related to the Indian festival takes place during “Akshaya Trithiya”.) According to Anil Dhanak, Managing Director of Kanz Jewels, “As always, we are seeing increased interest in buying gold and jewelry during the holiday season. Yes, this year we expect an additional boost as gold prices are at their lowest this year.

Our customers see this auspicious buying season as the perfect time to take advantage of lower prices.

– Anil Dhanak of Kanz Jewels

At present, most gold buyers in the UAE know how to go about making their next purchase during times of price volatility. All they need to do once they have decided to buy is wait for a price they feel comfortable with, then make a reservation at that price and pay a deposit of 5 to 10%. Then all they have to do is select the date of the actual purchase – if gold prices fall further, they profit. And if prices were to rise from the levels they had reserved, they would still benefit from the lockdown.

“In the past two months, when the price of gold fell to its lowest level in three years, almost 50% of our buyers went online to lock in their prices,” said a jeweler. “They’re not millennial or Gen Z shoppers, but these shoppers know how to get the best prices.” (Retailers are also offering cashback programs and reduced manufacturing costs for Diwali.)

Indian tourists too

This year, Diwali-related sales in the UAE are going to see a significant increase thanks to Indian tourists. Hotel bookings have already picked up steam, although some operators say there is competition from Australia, where the ICC T20 World Cup is set to take place. Moreover, there are Indian football fans who will travel to the UAE and Doha in November rather than now.

Even so, the number of Indian tourists is still large enough and the UAE gold trade has started to see more of them at the Deira Gold Souq and other jewelry hotspots. “Even though the Indian rupee has recently gone from Dh22 to the dirham, these tourists have enough purchasing power,” said a gold retailer. “They just have to look at the 15-18% price advantage of buying here.”

According to Avinash Adnani, Managing Director of Pluto Travels, “Diwali has literally lit up the travel scene in Dubai and the UAE. With the first Diwali in 3 years without any restrictions, the Indian traveler is thronging to Dubai like never before.

“The same is apparent from the fact that most of the hotels in Bur Dubai, which is a favorite area, are already fully booked. Airfares are skyrocketing and local excursions are booked in advance. This year’s favorites are the Museum Of Future, Miracle Garden, Burj Khalifa, Aquaventure and Dubai resort theme parks.

On the other hand, the overall cost of travel from India compared to previous years has increased.

– Avinash Adnani of Pluto Travels

A couple’s package costs $600 and more per person, not including airfare, “which is almost 20% higher than in previous years,” Adnani said. “It hasn’t dampened tempers though and Dubai is ready for an exceptional Diwali.”

Malls and outlets also hope to share this spirit – and of course, gold and jewelry retailers in the UAE too. Provided that gold prices remain at current levels or even fall further.


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