Lower making charges, VAT refunds on purchases, higher customs duty by other countries, and price lock-in schemes have all made Dubai a popular and preferred choice for buying gold jewellery.
Shoppers can buy gold jewellery for as little as Dh200 through savings and other advance payment schemes, making it much easier for people to buy precious metal jewellery.
Known as the City of Gold, Dubai attracts shoppers from around the world who come to buy gold and jewellery from the emirate, thanks to a variety of designs, special campaigns and competitive prices offered by retailers. Shoppers can get their hands on gold and diamond jewellery designs across Asian, Arab and European regions.
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Tawhid Abdullah, chairman of Dubai Jewellery Group, said jewellery in Dubai is known for its purity, variety and competitive pricing as compared to various other markets.
“Dubai’s retail jewellery sector caters to over 180 nationalities residing in Dubai with its jewellery import from over 30 countries, thus meeting the demand from global tourists visiting Dubai. Gold jewellery gets sold in Dubai all the way from 18K, 21K, 22K up to 24K,” he said.
Abdullah said jewellers in Dubai focus on the volume of business, hence, for most of them, making charge is fixed per gram and will be much lower compared to markets such as India where making charge is calculated in percentage of the gold price.
“Therefore, fluctuations in the gold rate will not affect the making charge of jewellery in Dubai. Secondly, the customs duty hike in India has further increased the price of jewellery in India. Tourists can avail of VAT refund at Dubai airports which is an added advantage.”
Shamlal Ahamed, managing director for international operations, Malabar Gold & Diamonds, credits a congruence of millions of jewellery designs, and some of the lowest gold prices in the world, especially in comparison to countries such as India, for people buying precious metal jewellery in the emirate.
“These factors have led to a general affinity of consumers towards gold jewellery, resulting in an appreciating value of gold. Its appeal as a safe haven investment has consistently shown a growth in value.”
According to John Paul Alukkas, managing director Joyalukkas Group, people are drawn to buying gold and jewellery in Dubai due to tax-free shopping, competitive prices and great choice of designs.
“From traditional to contemporary designs, the city caters to diverse tastes, ensuring customers find pieces that resonate with their preferences.”
Price lock-in schemes are one of the most popular programmes that allow shoppers to pay a 10 per cent advance and reap the benefits of potential gold rate increases.
In the event that the gold rate rises during the purchase period, customers enjoy the advantage of securing their jewellery at the initially booked rate. On the flip side, if the gold rate dips during the purchase period, customers have the opportunity to buy their desired pieces at the lower prevailing rate, ensuring a win-win proposition as they get the best value for their investment.
Shamlal Ahamed said programmes such as price lock-in or advance schemes have been a key tool employed by shoppers for buying and investing in gold jewellery because these schemes provide a safeguard from the constant fluctuations in gold prices, allowing them to block the gold rate by paying a small token amount as an advance.
“This is especially beneficial during holidays and festive seasons wherein heavy gold buying is typically seen. At Malabar Gold & Diamonds, customers can pay a 50 per cent advance to block the gold rate for 3 months or pay 100 per cent to block the rate for 6 months. We also roll out a special 10 per cent advance option during auspicious and festive periods. By enrolling in the advance schemes, customers can buy gold at the blocked rate in case of a rise in price and if the price drops, they can draw mileage from the lower rate,” he said.
John Paul Alukkas added that price lock-in schemes have gained significant popularity in Dubai, and their prevalence continues to grow as they provide customers with the assurance of stable prices in an otherwise dynamic market, contributing to its widespread acceptance.
“A diverse range of nationalities are embracing these schemes, primarily Asians. While the appeal cuts across various demographics, we've noticed a particular interest from the Indian community. Their proactive approach towards securing future investments aligns well with the principles of stability and financial foresight that price lock-in schemes offer,” he added.
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