Gold Buying Decisions for Diwali Amid Record Prices
As Diwali approaches, many shoppers in Dubai are faced with a dilemma: should they buy gold now at record-high prices or wait for a potential dip? This festive season, which symbolizes wealth and prosperity, traditionally sees a surge in gold purchases, prompting consumers to weigh their options carefully.
The Current Gold Market Landscape
Gold prices have reached unprecedented heights in recent weeks, prompting discussions among potential buyers about the best time to make a purchase. Financial analysts predict that gold could rise further, with estimates suggesting prices may reach between $4,488 and $5,000 per ounce by 2026. This represents a potential increase of 10 to 20 percent from current levels. Suki Cooper, global head of commodities research at Standard Chartered Bank, noted that while the current rally appears robust, a short-term correction could be beneficial for a sustainable long-term trend.
The surge in gold prices can be attributed to several factors, including geopolitical tensions, increased central bank purchases, and a growing interest in gold funds. According to the World Gold Council, global gold ETF holdings rose from 3,616 tonnes in the second quarter of 2025 to 3,692 tonnes in the third quarter, reflecting a strong demand for the precious metal.
Consumer Sentiment and Buying Traditions
Despite the high prices, cultural traditions play a significant role in driving gold sales during Diwali. Rashid Al Harmoodi, Senior Director of Property Management at Ithra Dubai, emphasized that consumer sentiment during this festival often outweighs economic concerns. Many people view Diwali as an auspicious time to invest in gold, which is seen as a symbol of wealth and prosperity.
Jewellers are keen to highlight gold’s long-term investment potential, even as they acknowledge that jewellery typically comes with higher costs due to design and making charges. Vinay Jethwani, a partner at Meena Jewellers, remarked that gold has consistently proven its value over time, and customers tend to adapt to new price levels quickly.
Promotions and Incentives for Shoppers
In response to the current market conditions, many jewellers are offering promotions to attract buyers. Muneer Thangals, Chairman of Thangals Group, mentioned that the steady rise in gold prices has bolstered consumer confidence in gold as a secure investment. His company is offering Dhanteras and Diwali promotions, including 8-gram gold coins without making charges, and the option to exchange old gold for new designs.
Malabar Gold and Diamonds is implementing a unique scheme that allows customers to pay a 10 percent advance to lock in current rates on festive collections. This strategy provides buyers with the flexibility to benefit from either locked-in rates or lower prices if they drop before the purchase is finalized.
Bafleh Jewellers is also offering competitive buyback rates and attractive exchange terms, allowing customers to recover a portion of their making costs. The company provides a wide range of gold products, including coins and bars, catering to various consumer preferences.
The Philosophical Approach to Gold Buying
While many retailers focus on promotions, some, like La Marquise, emphasize the timeless value of gold as an investment. CEO Nishith Shah stated that purchasing exquisite jewellery should not be viewed solely through the lens of short-term gains. Instead, he advocates for viewing gold and diamonds as long-term investments and heirlooms.
Kanz Jewellers takes a similar stance, asserting that gold is eternal and represents wearable wealth. Arjun Dhanak, Director at Kanz Jewels, believes that while price fluctuations may occur, the intrinsic value of gold remains steadfast.
JoyAlukkas, another prominent retailer, highlights the emotional significance of gold purchases. A spokesperson noted that buying gold is not just about market timing but about preserving value for the future and participating in a cherished tradition.
Challenges in the Current Market
Despite the promotional efforts, challenges persist for consumers. Making charges can range from 5 to 15 percent or more, and these costs are typically unrecoverable upon resale. Retailers often compete to offer the best deals, and buyers are advised to seek hallmarked gold with Bareeq certification to avoid scams or impurities.
Aditya Singh, Head of International Business at Titan, noted that customers are increasingly savvy and expect the best exchange values as prices rise. He anticipates a strong Diwali season, despite the broader economic uncertainties.
Cautionary Insights on Gold Investment
While many consumers are eager to invest in gold, experts caution against making hasty decisions in a high-price environment. Willem Buiter, a former member of the Bank of England’s Monetary Policy Committee, warned of a potential gold bubble, suggesting that central banks should consider selling their holdings. He argued that the current high prices may not reflect gold’s true value.
Investment firm Charles Schwab advises a long-term perspective when considering gold purchases. Their research indicates that attempting to time the market often leads to missed opportunities. Instead, they recommend developing a solid investment plan and acting promptly.
Vijay Valechha, Chief Investment Officer at Century Financial, provided a historical perspective, noting that households purchasing gold two weeks before Diwali have seen substantial returns since 2000.
FAQs
What factors are driving the current rise in gold prices?
The rise in gold prices is influenced by geopolitical risks, increased central bank purchases, and heightened demand for gold funds, leading to a significant surge in global gold ETF holdings.
Are there any promotions available for gold purchases during Diwali?
Yes, many jewellers are offering promotions, such as zero making charges, locked-in prices, and attractive exchange terms to encourage buyers during the festive season.
Should I buy gold now or wait for prices to drop?
Experts recommend taking a long-term view when investing in gold rather than trying to time the market. While prices are high, gold has historically proven to be a reliable investment over time.
Conclusion
As Diwali approaches, shoppers in Dubai face a complex decision regarding gold purchases amid record prices. While cultural traditions drive demand, potential buyers should carefully consider their options and the long-term value of gold. With various promotions available, consumers can navigate this festive season with informed choices that align with their investment goals.
Also Read:
Gold Prices Rise in UAE Amid Global Economic Uncertainty
