Jewellery sales down 30% amid recession

Gold jewellery sales in Dubai are down around 30 per cent in June on a year ago, as high prices of the metal and the economic crisis deter tourists from visiting the emirate, five jewellery retailers said. Almost eight million tourists visited the emirate, branded as the City of Gold, last year, many of them lured by the tax-free jewellery. But retailers say they have seen far fewer tourists this year due to the economic crisis. "In June sales were down about 30 per cent from last year. Because of the hot weather and economic conditions less tourists are here to shop," said Sanjay Jity, a shop keeper from Al Khaledyah Jewellery in the old souk, or market. Hotel revenues in Dubai fell 40 per cent this May and June compared with the same months last year, according to hospitality agency STR Global. The Dubai Department of Tourism and Commerce Marketing said 7.7 million tourists came to Dubai in the year to December, but had no updated figures for this year. The higher price of gold has also deterred buyers, another salesman at the souk said. The retail price of 22 carat gold was around Dh101 per gram, 20 per cent higher than last year, he said. "Many people now can't afford these prices," the salesman said. Gold has risen about 26 per cent to about $921.75 an ounce on Wednesday from a low near $680 in October, as investors buy the metal as a safe haven in a time of economic uncertainty. Demand for gold in the Middle East fell 26 per cent year-on-year during the first quarter, bucking a global trend that saw demand increase as investors bought gold as a safe haven from the economic maelstrom, the World Gold Council said in its quarterly report in May. "The volatile prices of gold is another factor that is scaring buyers, but I think the price will stabilise over the coming few months which should push jewellery sales up again," said Pradeep Unni, a trader from Richcomm Global Services. Retailers in Dubai's gold souk believe the slow sales will continue until the end of September and might pick up by the end of the year as the economy recovers. "We are hoping that the economic conditions will improve by October to November, otherwise many businesses will be in trouble," a retailer said. Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here .