Gold shops say sales have increased in Dubai

Gold shops say sales have increased in Dubai By Sunita Menon, Staff Reporter/GULF NEWS Published: August 27, 2007, 23:06

Dubai: Business is brisk at gold shops, with outlets reporting an increase in sales.

"There has been a slight increase in gold prices, but it has not affected our sales," said P. Shine, of Alukkas Jewellery outlet at the Gold Centre in Dubai.

"A fluctuation in gold prices does not make a difference to residents or overseas buyers. This is because over here you do not pay tax ... we are looking forward to the rush from the festive season from next month onwards," said Shine.

A cross section of residents who spoke to Gulf News said their reasons for purchasing gold vary - some buy it as a gift for their wife or daughter during festive occasions while others buy it as an investment.
They said people trade and buy gold for diversification of existing investments. This means gold comes into use when the stock market fluctuates and the real estate market is down.

Asians usually buy 24 carat gold while Europeans prefer 18 and 21 carat. Nilang Shah, a Dubai-based financial consultant, said that whenever a gold trader buys a bar, he pays a premium to the bank for buying it.

Competition

He explained: "What happens is that in a place like Dubai when they mould the bar into jewellery, the costs are competitive in comparison to other countries. Charges may vary from Dh2 per gram to Dh20 per gram depending on the design and the make."

He said Indian jewellers get the work done in India because the charge to make gold is an important component. "When you sell a particular piece of jewellery you get the gold price and not the production charge," said Shah.

Supriya, a housewife who purchases gold and diamond jewellery regularly, said that it is the design that she focuses on.

Umang Navneet, a Dubai-resident, said: "An individual who buys 22 carat gold does so because of its high purity content and also because it will fetch him a good exchange price."