UAE: Gold jewellery prices hit 3-week-high; why are shoppers still buying?

Festivals, holiday season keep the country's gold jewellery demand high


Waheed Abbas

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Photo: AFP
Photo: AFP

Published: Tue 2 Jan 2024, 12:53 PM

Last updated: Tue 2 Jan 2024, 2:05 PM

UAE consumers continue buying precious gold jewellery during the festival and holiday season despite gold prices reaching a multi-week high.

Retailers in Dubai said that gold jewellery is still a preferred choice of UAE consumers as compared to coins and bars even when the prices rally because shoppers use it as an ornament and also benefit from its price increase.

During festivals and the holiday season, residents also buy gold jewellery as a gift for their loved ones. The wedding season also contributes significantly to the gold jewellery demand.

Gold prices hit a three-week-high, last week and also opened higher on Tuesday, the first trading day of the year, surpassing Dh250 per gram. The Dubai Jewellery Group data showed 24K, 22K, 21K and 18K were trading higher at Dh250.5, Dh232.0, Dh224.75 and Dh192.5 per gram, respectively, on Tuesday morning.

Buyers, not sellers

Shamlal Ahamed, managing director for international operations, Malabar Gold and Diamonds, said even though the market has experienced an upward fluctuation in gold prices, there is no corresponding rise in the number of customers visiting the showrooms to sell their jewellery.

“This trend can be attributed, in part, to the ongoing festivities and holidays, during which customers typically focus on purchasing gifts for their loved ones,” he said.

John Paul Alukkas, managing director, Joyalukkas Group, said it is not uncommon for some individuals to evaluate their gold and jewellery holdings when gold prices are at a high, however, there is nothing concrete to suggest that a majority of residents may consider the possibility of selling and repurchasing later at a potentially lower rate because most buyers like to hold on to their gold and jewellery.

Jewellery vs coins & bars

However, there is indeed increased interest in gold coins and bars when prices rally, added Alukkas.

“However most of our clientele still prefer to stick to gold jewellery as an investment. Customers who prefer to buy gold coins and bars are primarily more investment-focused hence consider it a reliable investment during times of price appreciation. Gold coins and bars are often seen as a secure asset, appealing to investors looking to diversify their portfolios. In contrast, jewellery, while retaining its emotional and aesthetic value, may take a backseat for some during these phases, with consumers prioritising gold in more liquid forms for investment purposes,” he said.

Ahamed noted that UAE consumers do have an affinity towards gold coins and gold bars, but the dual value of jewellery as both a beautiful adornment and as an asset of appreciating value gives it an edge over gold coins and bars.

What jewellery are people buying?

Shamlal Ahamed added that there has been an increasing preference towards diamond and lifestyle jewellery, especially amongst millennials and Gen Z buyers who prefer lightweight yet fashionable designs that can be used casually for daily wear or office wear.

“The aspirational value of natural diamond jewellery has also shot up in recent years.”

John Paul Alukkas revealed that consumers are inclined towards pieces that not only showcase craftsmanship but also reflect their individuality.

“The emphasis on uniqueness and personal expression is shaping the demand for bespoke and custom-designed jewellery. Consumers are seeking pieces that stand out, offering a modern twist to traditional diamond jewellery,” he added.


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