Dubai gold and jewellery shoppers are postponing their plans to purchase the precious metal, anticipating a price drop following record highs this month.
Industry executives report a steady increase in demand for the 18K variant of the precious metal, the most affordable among all four variants, driven by Millennial and Gen-Z consumers in recent years.
The precious metal prices reached a record peak of $2,194.99 on Friday. In the UAE, the 24K variant was trading at Dh263.75 per gram, while 22K, 21K and 18K were trading at Dh244.25, Dh236.25 and Dh202.5 per gram, respectively.
Dubai is a popular destination for gold and jewellery shoppers, with many visitors flocking to buy the coveted yellow metal for wedding ceremonies. Purchasing gold jewellery ranks high on the to-do list for tourists visiting the City of Gold.
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“As the gold prices have reached a record high, customers are delaying their jewellery purchases for the festive season in anticipation of a drop in prices,” said Shamlal Ahamed, managing director for international operations at Malabar Gold & Diamonds.
The festivals celebrated in the Indian Subcontinent during the last quarter of the year have significantly boosted the demand for gold and jewellery. In certain religions, purchasing this valuable metal is deemed auspicious during specific occasions, further driving the market.
Optimistic about demand
Many jewellers in Dubai offer advance or lock-in facilities to shoppers, allowing them to block the prevailing gold rate by paying just 10 per cent of their purchase value as advance. If the prices increase further, customers can buy jewellery at the blocked rate, and if the price drops, they can draw mileage from the lower rates.
With prices trading at their peak, Ahamed noted that there has been an increase in customer enrollment to a 10 per cent advance programme and jewellery purchase plan, which greatly benefits customers in securing the best rate for their future purchases.
Considering the ongoing jewellery purchase trends and strong market resilience witnessed in the last couple of years, particularly the post-pandemic era, Ramesh Kalyanaraman, executive director, Kalyan Jewellers, is optimistic about the demand momentum continuing to showcase an upward trend.
“Gold has always been a preferred saving option, and we have witnessed a significant uptick in consumer demand with good footfalls. Throughout the year, we have witnessed a sustained and notable demand for heavyweight, studded, and traditional bridal jewellery pieces,” he said.
18K, men’s jewellery demand
Shamlal Aham added that demand for 18K jewellery – which mostly comprises lightweight and lifestyle jewellery – has been on the rise for the past few years now.
“This is unrelated to the current price surges and speaks more to the variation in customer design preference in the market, especially with the entry of Millennials and Gen-Z consumers,” he said.
Ramesh Kalyanaraman added that there has been an acceleration in demand for traditional temple jewellery as well as polki and uncut jewellery pieces, especially from the younger generation.
“At the same time, there is sustained demand for dual-tone jewellery designs as well as diamond jewellery, which offer versatility for casual occasions and festive celebrations.
“Furthermore, there has been a growing popularity observed in platinum jewellery pieces, indicating a shift in consumer preferences towards this particular metal.”
He added that in recent years, there has been a significant uptick in the men’s jewellery segment, which has now become a fast-evolving category offering immense growth potential. “We foresee strong demand momentum and an uptick in men’s jewellery, considering jewellery has emerged as a prominent gifting option,” added Kalyanaraman.