Dubai: With gold prices remaining subdued right through, Dubai’s jewellery trade struck it rich during Dubai Shopping Festival (DSF) 2014, with volumes on track to be the best ever in five years. By the end of the promotional run on February 2, the 180 retail outlets participating in the campaign sold nearly 7.5 tonnes worth of the metal in various forms.
A surge in buying in the four days ahead of the promotional run coming to an end could add a further tonne or two to the overall tally, market sources said. “January 24, which was a Friday, saw the highest offtake where participating jewellery outlets sold approximately 400-kilogram on a single day,” said Tomy Joseph, general manager at the Dubai Gold & Jewellery Group. “Stats from the outlets show salve have been the best in the last five years.”
During the run, a daily raffle of one-kilogram of gold was conducted, which had been another factor adding to the interest.
But senior industry sources maintain that volumes could have been even higher if it were not for the fact that most shoppers, particularly domestic, had already committed significant purchases in the period between April – when gold prices first started to show a weakness – to December. “Those weeks in April sucked up quite a bit of the cash available with shoppers and there were periods thereafter where they felt comfortable with the gold prices and bought some more,” said Joy Alukkas, chairman of Joyalukkas Jewellery.
“During DSF 2014, our shops recorded 15-20 per cent increase in sales over last year, but my instinct says it could have been closer to 40-50 per cent if shoppers had not already made sizable purchases in earlier months.”
By and large, shoppers and the jewellery trade seem to have found the sub-$1,300 an ounce level comfortable. (In Dubai, a 22-carat was quoted at Dh134.86 a gram early on February 3.)
“Gold had an exceptional run for 11 straight years peaking at $1,920 an ounce mark; but this was a peak whose initial point was at just over $250,” said Alukkas. “If it now goes through a period of soft values, it is only to be expected. What was remarkable about the upturn was that it continued for long.
“Except for a few retail investors who buy ten tola (TT) bars, there is not even the subtlest of change in why the majority of shoppers in Dubai buy gold — as an asset they can pass on and wear in the present. Nothing much has changed.”