Jewellers in the UAE are celebrating following Diwali after consumers continued to buy gold during the festival at the weekend despite record high prices for the precious metal.
Diwali glitters for UAE's jewellers
Jewellers in the UAE are celebrating following Diwali, after consumers continued to buy gold during the festival at the weekend despite record high prices for the precious metal.
Consumers bought about the same quantities as last year but as the price of gold reached almost US$1,400 (Dh5,141) per troy ounce, they spent 15 per cent more, said Chandu Siroya, the owner of Siroya Jewellers and the vice chairman of the Dubai Gold and Jewellery Group. "I'm pretty happy with what happened this season," he said.
Diwali, known as the festival of lights , took place on Friday. It is considered an auspicious time to buy gold.
Many Hindus also celebrate Diwali with a shopping spree, as they are expected to wear new clothes and buy household essentials for the event. But with the price of gold closing at $1,395 on Friday in New York, retailers anticipated a tough market. The price reached a record high and was a steep increase from the average price in the fourth quarter last year of $1,099.63, according to the World Gold Council.
Sales have recently been down because of the price hikes but Diwali revellers provided a much-needed boost.
"We were surprised that it went well, we were really surprised," said Tushar Patni, the owner of Ajanta Jewellers in the capital and a member of the Abu Dhabi Gold and Jewellery Group. He said sales numbers at his shop, which offers mainly 22-carat gold pieces, were down but the value of sales was up by 20 per cent.
"Many customers converted from gold to the diamond jewellery because we put on a very big promotion this year, especially during the Diwali time," he said. Alison Burns, the regional head of precious metals at Standard Bank's Dubai branch, said demand for gold had risen this year because of its status as a safe haven during economic turmoil.
"There seems to be sufficient investors in the market that are looking at this and saying, 'Hmm. Not too convinced. We're still going to buy into gold,'" she said. Experts say the gold price has the potential to go higher, with some analysts forecasting levels of $1,500 per troy ounce this year.