Diwali shopping: Gold rush at Dubai jewellers

Diwali shopping: Gold rush at Dubai jewellers

Gold merchants in the UAE are optimistic about upcoming sales due to the start of the Diwali festival.

By Rohma Sadaqat

Published: Thu 27 Oct 2016, 5:00 PM

Last updated: Sat 29 Oct 2016, 12:14 PM

Demand for jewellery in the coming days will be driven by shoppers looking to purchase in light of the auspicious occasion, as well as for investment purposes, experts in the region have revealed.
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Shamlal Ahamed, managing director of international operations at Malabar Gold & Diamonds, told Khaleej Times that gold prices have been at an affordable level this year, and that there was a drop in the price towards the beginning of October 2016.
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"The price has been steadily increasing since, and hence we feel that it is a good time to purchase," he said. "Historically, customers have always preferred to buy gold and diamond jewellery during festive periods. Diwali is one such key festival. This includes customers from all walks of life and religions. For some, the reason for purchase is their personal beliefs and festivities; while for others, it is a great jewellery shopping opportunity due to the fantastic offers, and special festive collections launched by prominent retailers in the region. We expect a great festive season sale this year."
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Asked what customers were mainly interested in buying, and which designs were proving to be most popular, Ahamed noted: "We have seen a change in buying trends in the last few years. Customers are more interested in buying diamond, uncut diamonds, and precious gems jewellery. Gold jewellery still remains the bulk of the sale, however within the gold category we see the percentage of lightweight and fashionable jewellery constantly increasing. We have launched over 110 special festive jewellery collections to cater to the changing and evolving requirements of the customers."
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Mihir Kapadia, CEO and founder of Sun Global Investments, noted that Diwali and the festival season always witnesses a strong demand for gold buying in India. The seasonal demand has been a major factor in the pattern of gold demand for at least two decades, and he expected this year to be no different. "We do not expect it to boost prices significantly as the overall market is subdued due to worries about rising interest rates and rising stock markets. If the Federal Reserve does not indeed hike interest rates in December, we expect gold to see a more positive trend and possible bounce back."
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Speaking in regards to sovereign gold bonds as a viable alternative to gold jewellery, Kapadia said: "When it comes to the Diwali festive season, the general public in India look to buy gold as an investment option in the form of jewellery. There will always be good seasonal demand for jewellery gifts at this time of the year. However, if one looks at it purely from an investment perspective, investors in India are looking at the government issued India Sovereign Gold Bond as one of the viable and healthier alternatives. These bonds offer the easy way to gain exposure to the gold prices, without the inconvenience of storing the physical metal."
"The Indian government has already been pushing the bonds with considerable discount rates, and it is right in time for the festive season," he added. "The bonds have a tenure of eight years and exit option from the fifth year onwards; the investor would benefit from the upward movement of the gold prices, if any, as well as a solid 2.5 per cent interest rate on maturity."

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