As the price of gold dropped below $2,000 an ounce, UAE gold shoppers are taking advantage of the low prices just in time for the upcoming Hindu festival of Akshaya Trithiya. The festival, which is celebrated in late April or early May, is considered one of the most auspicious days for purchasing gold and other precious metals.
With gold prices dropping to their lowest in nearly nine months, retailers in the UAE are expecting a surge in sales for Akshaya Trithiya, which is set to be celebrated on May 7. The drop in gold prices has been attributed to the strengthening of the US dollar, which has made gold, which is traded in dollars, more expensive for buyers using other currencies.
For UAE gold shoppers, this presents a unique opportunity to purchase gold at lower prices. UAE-based gold retailers are gearing up for increased demand for gold, with some offering discounts and promotions to lure customers.
According to Vijay Valecha, Chief Investment Officer at Century Financial, the drop in gold prices is not surprising given the recent strength of the US dollar. “Gold is traded in dollars, and a strong dollar makes gold more expensive for buyers using other currencies,” he explained.
Valecha added that gold prices may continue to fluctuate in the short term, but he expects prices to stabilize in the long term. “While the short-term outlook for gold prices may be volatile, the long-term outlook for gold remains positive due to the ongoing economic uncertainties caused by the pandemic,” he said.
Gold is considered a safe-haven asset that investors turn to during times of economic uncertainty. With the ongoing COVID-19 pandemic, which has caused widespread economic disruption, investors have been turning to gold as a safe-haven asset. However, with the rollout of vaccines and the gradual return to normalcy, the demand for gold has decreased, leading to a drop in prices.
Despite the drop in gold prices, experts advise caution when purchasing gold. “While it is a good time to buy gold, investors should be careful not to over-invest in the precious metal,” said Valecha. “Gold should be a part of a diversified investment portfolio and not the sole investment.”
The Indian community in the UAE, in particular, is expected to take advantage of the drop in gold prices ahead of Akshaya Trithiya. The festival, which is celebrated by Hindus across the world, is considered an auspicious day for buying gold and other precious metals.
Many Indian expats in the UAE celebrate Akshaya Trithiya by purchasing gold, with some even taking advantage of the occasion to buy gold jewelry for weddings and other special occasions.
According to Kalyan Jewellers, a leading gold retailer in the UAE, the company is expecting a surge in demand for gold in the lead-up to Akshaya Trithiya. “Akshaya Trithiya is one of the most auspicious days for purchasing gold, and we are expecting a significant increase in sales,” said T.S. Kalyanaraman, Chairman and Managing Director of Kalyan Jewellers.
To cater to the expected surge in demand, Kalyan Jewellers has announced a range of discounts and promotions for customers, including free gold coins with select purchases and discounts on making charges for gold jewelry.
Other gold retailers in the UAE, including Malabar Gold & Diamonds and Joyalukkas, have also announced discounts and promotions for customers ahead of Akshaya Trithiya.
While the drop in gold prices may present a unique opportunity for UAE gold shoppers, experts advise caution and careful planning when investing in gold. With the long-term outlook for gold remaining positive, investors should view gold as a part of a diversified investment portfolio and not the sole investment.
