While the summer holiday sees a decline in gold jewellery purchases by tourists in the UAE, this is balanced by an increase in sales from expatriate residents. Expats purchase gold jewellery as gifts, for festivities, and to take advantage of cheaper local rates before returning to their home countries for the season.
Summer marks a peak outbound travel period in the UAE, with many residents heading to their home countries or cooler destinations in Europe, the US, and Asia. The significant population of Asian expatriates in the UAE notably contributes to the rise in gold jewellery sales during this time.
“Jewellery is a value-appreciating gift, making it a popular purchase for residents travelling back to their home countries. Dubai also gives consumers access to a vast array of designs from around the globe. Additionally, with gold prices in Dubai being 10-15 percent lower than in countries like India, it makes financial sense for expats to buy jewellery here. Furthermore, travelling back home often involves participating in festivities and cultural celebrations, where wearing jewellery is an essential part of the tradition,” said Shamlal Ahamed, managing director for international operations at Malabar Gold and Diamonds.
Ahamed noted that the increase in sales typically continues until mid-July and then picks up again towards the end of August, ahead of the festive season.
John Paul Alukkas, managing director of Joyalukkas Group, highlighted a trend among expatriates purchasing more gold jewellery while visiting their home countries during summer. “This inclination is often motivated by favourable gold prices here compared to their host country, along with potential tax advantages and exemptions. Hence, expats may take advantage of this,” said Alukkas.
Echoing his peers, Anil Dhanak, chairman and managing director of Kanz Jewels, mentioned that expatriates buy gold jewellery before heading back to their home countries for their annual vacations to present as gifts for family and friends or as a secure investment.
Data from the World Gold Council for 2023 indicated a demand for gold jewellery of 9.2 tonnes in Q3 compared to 9.7 tonnes in Q1, 10.6 tonnes in Q2, and 10.3 tonnes in Q4.
Gold jewellery purchases by tourists during the summer typically slow down due to fewer visitors, but sales rise again during the festival season and winter. Shamlal Ahamed explained that summer is the peak travel period for expats due to school holidays, and the major share of their jewellery sales during this time comes from resident customers.
Sales in Summer – Mixed Reactions
Gold jewellers expressed mixed reactions regarding jewellery sales in the current summer season.
“We’ve observed a notable uptick in gold jewellery sales this summer compared to past seasons. This is a good sign for jewellery retailers as well as the economy because it indicates a rise in purchasing power. This surge can be attributed to several factors: heightened tourist influx, increased celebrations like weddings and festivals, and a broader economic recovery fostering consumer confidence and expenditure. It is safe to say that we are in the golden era of jewellery,” said John Paul Alukkas.
He added that there was a healthy mix of residents and tourists contributing to gold jewellery sales during the summer.
Conversely, Anil Dhanak remarked that gold jewellery sales have not picked up this year despite the changes in summer season dynamics. “In fact, sales are down compared to the same period last year due to various factors, including economic conditions and fluctuating gold prices,” he added. He also noted that the primary buyers of gold jewellery this summer are Asians.
