19 November 2004
DUBAI - Despite higher gold prices, Dubai's gold jewellery trade reported brisk activity during the past one month with sales surging as much as 20 per cent at some point during a month-long festival promotion which ends today.
According to Dubai's Gold and Jewellery Group, the representative body of the city's wholesale and retail gold business, during the "Dubai, the City that Cares" promotion period, total sales turnover from some 240 participating outlets rose to Dh199.06 million this year from Dh184.32 million in 2003.
A more than 10 per cent hike in price as compared to the same period last year had not dent buyers' interest in the yellow metal, the group said.
"The trade has witnessed an year-on-year growth of eight per cent, but during the middle of the 'City that Cares' promotion, which was launched on October 14, sales went up as high as 20 per cent in spite of the higher gold rate, thanks to Eid and Diwali shopping," said K. P. Baiju, general manager of Dubai Gold and Jewellery Group. "However, sales tapered down in the past three days due to further a hike in the gold rate. And we expect seasonal sales to pick up in December."
In Dubai, retail gold jewellery rate surged from Dh44 per 22 carat gram to Dh48.50 this season, representing approximately 10 per cent rise.
Some jewellers surpassed the trade's average in sales growth thanks to special incentives. Joy Alukka, managing director of Alukkas Group, said the rise in sales in spite of the price rally reflected not only the confidence of consumers in the yellow metal but also the continuing lure of gold. He said the gold trade's marketing campaings also contributed to keeping up the momentum. According to him, in terms of volume, festival sales at his outlets had gone up by 12 per cent.
Babu John, managing director of Sky Jewellery, said sales surged by as much as 30 to 40 per cent in terms of value and 14 to 15 per cent in volume during the festival season which also coincided with Diwali. "There is nothing quite dramatic about this growth as a steady rise in sales has been a tradition with Dubai's jewellery trade over the past several years thanks to the city's growing profile as a global hub of gold and precious stones trade."
He said the trade was expecting further modest gains during December provided gold prices remained stable.
In the Gulf in general, retail gold sales recorded an upswing for most of the year. According to World Gold Council, for the second quarter of 2004, sales rose by 22 per cent from $1.03 billion to $1.253 billion compared to the same period of 2003. While Kuwait witnessed the largest growth of 28 per cent, Saudi Arabia posted a growth of 23 per cent and the UAE 21 per cent.
Analysts forecast the regional trend indicated that worldwide, the full year jewellery fabrication of the yellow metal would rise to a three-year high this year.
In the first half, total fabrication rose by six per cent year-on-year and in jewellery, the rise was more than six per cent or 79 tonnes -- to its highest first half total since 2001.
BY ISAAC JOHN
© Khaleej Times 2004
