As the price of gold has dipped in the last month, jewellers now forecast bullish increases in sales this Diwali.
Diwali festival a golden time for buyers and sellers
Gold and diamond sales are expected to spike this week as Hindus flock to jewellery stores ahead of the Diwali festival, which marks the beginning of a busy period for retailers.
During the Hindu celebration, popularly known as the Festival of Lights, it is common for expatriates from the Indian subcontinent to buy gifts for friends and family. Jewellers expect sales to increase by up to 30 per cent from the same period last year, and the festival is likely to boost annual sales dramatically.
"It is absolutely a very big opportunity for [the] industry to capitalise," says Damian Rakitha, the head of brands at Aaron Shum Middle East, which has a jewellery arm called Lifestyle. "Giving jewellery to loved ones is an important part of the festival."
Diwali purchases account for about 15 per cent of Lifestyle's sales, and Mr Rakitha forecasts that revenue will increase 20 per cent this year over the period last year.
The festival begins on Wednesday, but tomorrow Hindus will observe Dhanteras, when they go out to buy gold, even if it is a very small amount.
"You cannot buy a car or chocolate, you have to buy jewellery," said Mr Rakitha.
The Indian Embassy estimates the country's expat population in the UAE to make up about one third of the total population, and it is not just Hindus who are expected to buy during Diwali.
Many Muslims and Christians take advantage of the many promotions ahead of the Eid al Adha and Christmas holidays.
"It's very festive, the next few months is the biggest period for us," said Oofrish Contractor, the head of marketing at Liali Jewellery.
She predicts sales to increase more than 25 per cent this year for Diwali, as the company has added stores, increased its marketing.
"It's an occasion when everyone buys something new, and Hindus have to buy a precious metal," said Ms Contractor.
Liali has recently added stores in Meena Bazaar in Dubai and Al Wahda Mall in Abu Dhabi and also agreements with Citibank, Abu Dhabi Commercial Bank and Standard Chartered for the banks to provide financing for customers' purchases at Liali.
"We are expecting strong growth in sales because we are now in locations that cater to Asian customers, the markets where everyone goes shopping," said Ms Contractor.
The price of gold, which has risen dramatically this year but fallen slightly recently, is not expected to dampen sales.