Jewellers were kept busy yesterday as Indian buyers celebrated Akshaya Tritiya, traditionally regarded as the most auspicious day of the year to buy gold.
It has capped a strong start to the year for retailers despite the strength of the dollar keeping some overseas buyers away.
Gold jewellery sales increased in the first quarter, Dubai retailers said.
Sales of diamond jewellery – particularly by tourists – have been hit by the slowdown in the Russian market as well as a weaker euro. But gold purchases for investment purposes by Indian buyers are holding firm.
Gold prices have been stable for the past few months with spot prices at US$1,195.51 an ounce, compared with $1,195.50 four months ago.
The crisis in Greece and recovering demand in China and India are expected to help to raise its price to $1,400 per ounce by the end of the year, according to analysts at the London-based consultancy Capital Economics.
At Pure Gold Jewellers in Dubai, gold jewellery sales have jumped by 18 per cent in volume terms, and positive sentiment is expected to hold steady.
“A greater influx of Indian tourists with a stable Indian currency and gold prices and the rise of the expat population are among the reasons,” said Karim Merchant, the retailer’s managing director and chief executive. “Confidence is back, but the customer sentiment is going to be cautious going ahead.”
Pure Gold has 48 stores in the UAE with six more expected by the end of the year.
The majority of his gold buyers are Indian tourists and UAE residents, followed by Arabs.
At Cara Jewellers in the Dubai Gold and Diamond Park, Kiran Pethani, the owner, said gold sales remained stable but iamond sales had taken a hit.
About 80 per cent of his clients are European.
“The diamond sales has been affected by around 30 per cent with fewer Russian tourists and weak euro,” he said.
Mr Merchant said diamond sales were down by 6 per cent year-on-year in value terms. A majority of customers of diamond jewellery were tourists, mainly from Russia, China, the UK and the Arabian Gulf.
“We all underestimated the buying power of the Russians, and while the Chinese are still coming they are not spending as much,” he said. “The opening of the Iran market with the lifting of the sanctions can offset this.”
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