Dubai: Resident, tourist spending on gold exceeds pre-pandemic level

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The resident and tourist spending on gold jewellery sales in Dubai in 2022 has exceeded the pre-pandemic level.

Jewellers in Dubai say 2022 is closing on a high note, thanks to double-digit growth in the third quarter, and expect this momentum to continue in 2023 as well.

“This year has truly marked the return of normalcy across markets with minimal disruptions, garnering a sturdy revival in demand momentum. The customer sentiments were extremely positive during the dhanderas and we grew by approximately 25 per cent in revenue when compared to the previous year during the festive period,” said Ramesh Kalyanaraman, executive director of Kalyan Jewellers.

Shamlal Ahamed, managing director for international operations, Malabar Gold and Diamonds, said gold jewellery buying in Dubai has exceeded the pre-pandemic levels.

“This year, we recorded some of the highest-ever sales, as all the restrictions related to the pandemic have been completely lifted. The volatility of gold price and the subsequent price drop motivated a lot of customers to buy gold, which drove the sales even higher.”

According to Chirag Vora, director, Bafleh Jewellers, gold jewellery sales reached pre-pandemic level sometime in the middle of 2021. “Currently the entire industry is sitting comfortably above the pre-pandemic level.”

John Paul Alukkas, managing director – international operations, Joyalukkas Group, said the inflow of tourists post-pandemic has re-vitalised the jewellery industry and buying has reached a pre-pandemic level. “The Dubai Shopping Festival is also playing a vital role in pushing jewellery sales.”

Anil Dhanak, managing director, Kanz, echoed his peers' comments, saying the jewellery buying in Dubai has definitely reached pre-pandemic levels.

Who is buying more – residents or tourists?

Dhanak added that tourists are still the primary consumer base due to the price difference in gold between Dubai and the sub-continent. Expo 2020 and the new visa regime have added to the strength of residents as well which is why the market is also seeing growth in the volume of purchase from residents.

Since the UAE has a large number of expat population, especially from the Indian sub-continent, the largest volume of gold jewellery trade comes from residents, said Shamlal Ahamed.

“However, tourists also make up a significant portion, owing to the variety of designs from across the world that are available in the country and due to the price of gold being 10-15 per cent lower than most countries in South Asia and Africa,” added Ahamed.

Chirag Vora said 2022 has seen more resident customers buying gold jewellery compared to tourists. However, the contribution of tourists to gold jewellery sales is still vital.

Kalyan Jewellers has also been receiving a steady stream of demand and footfalls from both types of jewellery buyers.

“The reduction in global disruptions has led to a fresh influx of tourists in the region, who often aim to derive price benefits by making purchases in the region… On the back of ongoing demand momentum and stabilising gold prices, we are confident that the jewellery industry will register high double-digit growth in the third quarter of this financial year, carrying forward the trend of strong revenue in the early half of 2023,” said Ramesh Kalyanaraman.