Retail jewellers in Dubai will have to follow uniform quality parameters for diamond and precious stones in terms of colour, cut, etc, from June 15 and the municipality has issued letters regarding this, said sources.
As per earlier plans, the municipality should have implemented this last year. With severe fluctuations in the international gold price affecting jewellery sales and operating costs mounting in the past few years, many shifted focus to diamond and 18 carat jewellery and precious stones.
The international gold price, which was $257 an ounce in April 2001, rose to a high of around $433 in three months but it came down to $396 yesterday.
"Though the gold price, which is negatively correlated to the dollar value, is certain to see higher terrains, the irregular ups and downs have prompted many potential buyers to wait hoping for a better price," an Indian jeweller who runs a chain of outlets said. "On the one hand, the rent keeps rising at 10 to 20 per cent annually and on the other margins are under pressure."
In fact, since the Gold and Jewellery Group fixed the traders' margin at Dh1 per gram some three years ago, the gold price has gone up by at least 40 per cent. This has effectively narrowed the margin percentage as it is calculated on the quantity rather than on the value of gold sold.
At the same time, the group has not stipulated any fixed margin for diamond or 18 carat jewellery providing jewellers the flexibility to bargain profits in this segment. Moreover, the competition in the market has rendered pressure on making charges, which used to be an area that could be manipulated for higher profits.
The fact that the number of tourists is rising and they are generally in favour of 18 carat and diamond jewellery offers traders an opportunity to do profitable business.
Last year, several jewellers, especially those with a few outlets, either sold shops or closed down operations. Malabar Jewellery, Alappat Jewellery, Persian Jewellery, etc, are a few examples.
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