Gold jewellers and wholesale merchants in Dubai are getting ready for yet another busy season by placing orders to ensure that there is no shortage in the market. Eid, Christmas, New Year, Dubai Shopping Festival, and Valentine's Day will follow each other this season making it a hectic time for retailers.
Leading gold merchants told Emirates Business that the decline in prices has created a sharp increase in gold sales in the UAE with record orders coming from Libya, Iraq and a number of other countries in the region. Gold sales during the last edition of Dubai Shopping Festival crossed the Dh1 billion mark.
Pankaj Chidadila, Manager of SCG Jewellers, said: "We are a wholesale gold dealer in Dubai Gold Land with a manufacturing facility in Kolkata. Our handmade jewellery is sold to leading Dubai jewellers like Damas, Joy Alukkas, Al Haseena and all other leading names in the industry. We have been getting bulk orders from these clients and there was an acute shortage of gold in Dubai during Diwali. Pure gold is not available in the market and we have to pay $3 (Dh11) to $5 per ounce premium to the banks to get enough gold bars. This is an unprecedented situation in the market, which can push up retail price of gold."
Chidadila said his parent company Gouti Group of Companies has been in gold business for 200 years and the wholesaler is getting on an average 200kg of gold orders from clients in Saudi Arabia, Libya, Turkey and other parts of Middle East. "Many jewellers from Libya or Saudi would buy 200kg of gold because they feel it safe to do business in Dubai."
"We are now getting regular orders for Dubai Shopping Festival when consumers from around the world will be buying jewellery. For the DSF we are making special designs to attract maximum buyers. Lot of Arab customers like handmade Indian jewellery. Bangles is one of the fast moving items in the market. During the last nine months, demand from Iraqi customers has been going up substantially and by the year-end it is marriage season there," he said, adding that most wholesalers have good business in Dubai.
KP Baiju, Chief Executive Officer and Managing Director of Buz Consultancy, said: "Jewellery sales in Dubai have been stable because the gold price has come down and the festival sales are good. The forthcoming Eid Al Adha festival is a jewellery buying season. While the economic slowdown in the US and the UK is forcing consumers to keep away from spending on jewellery, Dubai has a good floating population. The situation here is not as bad elsewhere in the world. The downturn is not severe in Dubai."
He said the retail gold sales have been stable, especially after the opening of The Dubai Mall. "There are about 400 jewellery outlets in The Dubai Mall. All the shops are not open, but the outlets which have opened have recorded good turnover in the first two weeks."
Rajesh Shah, Director of Varun Trading Company at DMCC: "The Middle East gold market is doing better than the rest of the world because many tourists who want to buy gold come to Dubai. We are happy with the performance of our new outlet at The Dubai Mall. Many affluent Saudi and GCC customers come to Dubai to buy gold. The upcoming Dubai Shopping Festival and Valentines Day will be a busy season for the jewellery shops."
Ramesh Kakkadia, from D N Diamonds and Jewellery said gold trade is doing reasonably well in Dubai.
He said: "Money is there in the system but people's mindset has to change. We hope the DSF and Christmas season may change the sentiment. Gold price, whether high or low, should remain stable to attract more buyers. Some wholesale dealers are creating gold shortage. There is no shortage in the market. When the price fluctuates by $50 per ounce, gold disappears from the market."
