During the summer holidays, while tourist purchases of gold jewelry in the UAE decline, expatriate residents are stepping up their buying. They purchase precious metal jewelry for gifts and festivities at lower local rates before heading back to their home countries for the seasonal break.
Summer marks a peak period for outbound travel from the UAE, drawing many residents to cooler destinations or their home countries in Europe, the US, and Asia. The Asian expatriate community, in particular, significantly boosts the demand for gold jewelry.
According to Shamlal Ahamed, managing director for international operations at Malabar Gold and Diamonds, jewelry is a popular choice for expats traveling home due to its value appreciation and diverse designs available in Dubai. Expats find Dubai’s gold prices 10-15% lower than in countries like India, making it a financially savvy choice. Moreover, cultural celebrations back home often involve wearing jewelry, further driving sales.
Sales typically peak until mid-July and rise again in late August, just before the festive season, notes Ahamed.
John Paul Alukkas, managing director of Joyalukkas Group, observes a trend where expats buy more gold jewelry before their summer trips back home. Favorable prices in Dubai and potential tax benefits make this an attractive option for expats.
Anil Dhanak, chairman and managing director of Kanz Jewels, echoes similar sentiments, noting that expats see gold jewelry as both gifts and secure investments during their annual vacations.
Despite a decline in tourist-related sales during the summer, jewelers like John Alukkas remain optimistic about increased sales driven by rising consumer confidence, weddings, festivals, and economic recovery.
Anil Dhanak points out that this summer has seen fluctuations in sales due to economic factors, with Asians primarily driving the demand for gold jewelry.
Overall, while summer sees a slowdown in tourist purchases, expatriate residents play a pivotal role in maintaining and sometimes boosting sales of gold jewelry in the UAE.