After being under pressure for sometime, sale of gold jewellery is picking up as the demand continues to improve ahead of Akshaya Tritiya (tomorrow), an auspicious day in India for buying precious things and beginning new activities.
In addition to normal factors such as stock market volatility, the renewed buying interest is bringing in fresh physical demand in Dubai, home to a large number of Indian expats.
"Since most of the Indians prefer to buy gold during Akshaya Tritiya season, we see jewellery sales going up. We are upbeat on sales volume this season. Last year, our sales were up by 100 per cent and this year too, we are confident of achieving the same level in sales," Joy Alukas, Chairman of JoyAlukas, told Emirates Business.
"Physical demand is slowly and steadily emerging from the current levels because of the gold buying festival in India this week. This apart, the firm trend in flow of investment funds is supporting the market," said Pradeep Unni, senior research analyst at Richcomm Global Services, DMCC.
As a result, gold retail sales have turned attractive in Dubai, which records the world's highest per capita consumption of gold with an estimated average of 36 grams per person. "Most likely we will see a gradual improvement in gold prices bolstered by the concerns of the extended chaos in equity markets. Most of the momentum that we see in major stock markets around the world is emerging from the confidence shown by key policymakers and not really from true fundamental strength," Unni said.
"Sales are picking up and prices are also coming down. Along with World Gold Council, we are doing a promotional campaign to push gold jewellery sales ahead of Akshaya Tritiya. We see 10 times more sales during the two days of this festival," said Tomy Joseph, General Manager at Joy Alukas.
"We give priority to sales volume and not price rise. We are offering attractive promotion schemes for the benefit of gold jewellery buyers," said Joy Alukas.
However, this season retail sales may not match previous year's, said some traders.
"Last year, we recorded 100 per cent rise in sales. We anticipate that this year sales might be 50 per cent lower than previous year's figures," said Sandeep Raj, Manager at Damas, Carrefour (Shindaga).
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.