Last Updated :
05 February 2009 at 15:50 IST
Dubai gold jewellery sales crash by 60 percent
Commodity Online DUBAI: Dwindling property prices, daily reports of thousands of job losses and decline in tourist arrivals have adversely hit the
Gold sales in Dubai. Retail sales of gold and gold jewellery have crashed by as high as 60% in January despite the ongoing Dubai Shopping Festival.
A sharp decline in the sales of gold has been reported by leading gold chains in Dubai, known as the City of Gold. Gold retailers such as Joy Alukkas, Damas, Pure Gold and Atlas Jewellery have launched several innovative promotions schemes and prizes to lift the sagging gold sales in Dubai.
The World Gold Council (WGC) is one of the participants of the ongoing mega Jan 15-Feb 15 Dubai Shopping Festival. WGC’s promotion of gold in Middles East during this festival every year has earned Dubai the ubiquitous name ‘City of Gold.’
But a senior Dubai Shopping Festival official said that gold sales have lost the luster in the festival season because of the global credit crunch that has affected Dubai very badly. “Our reports say gold sales have crashed by over 60 per cent in January,” he told Commodity Online.
He said that gold sales in Dubai's traditional jewellery market have collapsed mainly because of the decline in tourist arrivals. Local jewelers who have been waiting for a big chunk of tourists said that less and less tourists inflow to the city has badly affected the sale of the yellow metal.
Dubai is heart of gold trade in the Middle East, and the City of Gold has been very much dependent on tourist interest.
This year, Dubai’s biggest shopping carnival has been dampened by the shortage of gold coins, for which there is a big demand. “People are coming and asking for gold coins. But there is a terrible shortage of gold coins. Many gold and jewllery shops in Dubai do not have the stocks of gold coins,” said a manager with Joy Alukkas, a leading jewellery in the Gulf Countries.
Gold jewelers are offering heavy discounts on purchases at the Festival. For instance, Damas stores have offered free
Gold coins with every purchase of gold and jewellery worth Dh500. “This mega promotion offered during the biggest regional shopping bonanza will give five shoppers the chance to win 100gm of gold every day and four lucky winners will also get an opportunity to win the grand prize of 1kg gold each,” said a statement from Damas.
Ali Abdullah, a gold importer based in Dubai said the biggest demand during the Dubai Shopping Festival is for gold coins weighing 8gms or a sovereign. Gold coins of 2gm and 4gm are also available, mostly on demand. “The Dubai Shopping Festival is in fact Dubai’s gold festival. That is the reason for the shortage in gold coins,” he said.
Abdullah said imported gold needs to be certified by the municipal authorities before they can be sold in Qatar. But the department did not function during Eid al-Adha. Hence whatever gold coin imports made could not be certified and that is one reason for the shortage, officials said.
The jewellery sector had its ups and downs during the second half of 2008 with a significant increase in Q3 (Dh4.3 billion) in Dubai followed by a slight drop in gold jewellery consumption in Q4. In UAE, the increase in gold demand reached 22% in tonnage terms; equal to 56% increase in value terms.
American jewellery retailer and manufacturer Tiffany & Co recently said that that trade fell sharply during the crucial November-December holiday period. Worldwide gold sales declined by 21 per cent to $687.4 million compared with $867.3 million in the same period in 2007.
The World Gold Council is linking up with retailer Damas to give away 20 kg of gold in a retail promotion during the Dubai Shopping Festival, which ends on February 15. Pure Gold Jewellers, meanwhile, is offering discounts of up to 50 per cent on its diamond collection.
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