As gold prices surge to unprecedented levels in the UAE, many cost-conscious consumers are opting to sell their old jewellery, while others are postponing new purchases.
Jewellers in Dubai have reported a slight decrease in gold jewellery purchases, as some customers are choosing smaller items and gold coins as a more secure investment in these uncertain times. Nonetheless, gold continues to be a popular safe-haven asset among shoppers in Dubai and the UAE, with sales remaining “stable.”
On Wednesday morning, gold prices fell below Dh400 per gram in Dubai after reaching a record peak of Dh420 per gram on Tuesday, coinciding with a global decline to under $3,400 per ounce.
The price of 24K gold was noted at Dh399.5 per gram when markets opened on Wednesday, down from Dh420 the previous day. This represents a complete reversal of the gains made on Tuesday.
Following an increase of nearly Dh20 per gram from Monday to Tuesday, gold prices dropped by over Dh20 between Tuesday and Wednesday. Similarly, the prices for 22K gold decreased to Dh370.0, 21K to Dh354.75, and 18K to Dh304.0 per gram. On a global scale, gold was trading at $3,322.44 per ounce on Wednesday morning, witnessing a 2.5 percent decline after briefly exceeding $3,500 per ounce on Tuesday.
Joy Alukkas, chairman of Joyalukkas Group, commented, “While the uptick in prices has led to a minor decrease in gold jewellery purchases, it hasn’t been drastic. However, we’ve noticed a change in purchasing patterns, with customers favoring lighter and smaller pieces, as well as looking into options like gold coins and smaller investment items.”
He also pointed out an increase in customers selling their old gold jewellery, especially those looking to profit from the current high prices.
“Many are trading in their old items for new designs, while others aim to secure the current gold rate before it potentially increases further,” he stated.
Shamlal Ahamed, managing director of international operations at Malabar Gold and Diamonds, mentioned that while a “slight slowdown” in purchases is expected from budget-conscious buyers, such fluctuations are usually brief as consumers adjust to the new pricing. “Importantly, there has been no significant rise in gold exchange transactions, which indicates that customers are retaining their gold assets — a clear indication of their confidence in its lasting value and stability.”
Consistent Sales
Ahamed noted that despite gold prices reaching record highs, customer attitudes remain strong. “Demand remains steady, reflecting a deep-seated confidence in gold’s enduring significance and its role as a secure and appreciating investment.”
Even with elevated gold prices, Joy Alukkas emphasized that sales have been “steady” across all their showrooms. “While some consumers are cautious, many continue to purchase gold as they consider it a stable, long-term investment.”
He shared that some customers are “still buying for special occasions, celebrations, or as part of their long-term wealth preservation plans.”
“We are observing positive sales trends, attributed to our appealing offers and innovative designs that align with current market demands,” Alukkas added.