Gold jewellers in Dubai and the UAE are reducing their profit margins to mitigate the effects of soaring gold prices, making precious metal jewellery more affordable for consumers.
Jewellers are employing “fair pricing” strategies to boost demand amid declining sales, offering benefits like reduced making charges, free coins, and vouchers to counteract the impact of historically high gold prices.
Gold hit a record high recently, with 24K reaching Dh440.5 per gram and 22K at Dh408 per gram. The prices eased slightly over the weekend, with 24K at Dh438.75 per gram and 22K at Dh406.25 per gram.
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Spot gold briefly surpassed $3,650 last week due to expectations of US interest rate cuts and a weaker jobs market. It settled at $3,643.1 per ounce over the weekend.
Shamlal Ahamed, Managing Director of Malabar Gold and Diamonds, highlighted their dedication to fair pricing.
“We prioritize value without sacrificing quality or design, ensuring customers have an exceptional jewellery shopping experience despite price fluctuations,” he stated.
Anuraag Sinha, Managing Director of Liali Jewellery, confirmed that UAE jewellers are reducing profit margins to assist consumers facing high gold prices.
“Many jewellers have lowered making charges, a key retail pricing element, to sustain sales amid rising gold prices, easing the financial burden for consumers. Some offer direct discounts of 25% or more on making charges. With slowing sales and market volatility, jewellers are voluntarily cutting profit margins to keep businesses running. This approach stabilizes demand even when margins are tight,” he explained.
To ensure fair pricing, many jewellers offer free gold coins, vouchers, or price-lock guarantees, Sinha added.
“Promotions and weekend sales sometimes feature zero making charges, especially on older inventory, reducing the final bill and allowing consumers to purchase jewellery even at peak gold prices. Many also provide gold exchange with no deductions, enabling upgrades without penalties.”
He noted that consumers are indeed benefiting from these initiatives.
For instance, a 25% reduction in making charges on a 20 gram necklace can save consumers hundreds of dirhams.
He emphasized that with a uniform gold rate, shoppers mainly experience savings on making charges, which are seeing significant reductions. “This ensures consumers aren’t overpaying for the gold content—they’re saving mostly on craftsmanship costs.”
Discounts sometimes require minimum purchases between Dh3,000 and Dh7,500, meaning not all shoppers benefit equally.
Aditya Singh, Head of International Jewellery Business at Titan Company, mentioned that long-term customer trust is prioritized over short-term margins industry-wide.
“Jewellers are balancing quality and pricing by optimizing internal costs, offering promotional making charges, and enhancing value without compromising craftsmanship,” he said.
He added that the company aims to provide competitively priced products that meet customers’ aesthetic and budget expectations.
“Despite price sensitivity, the desire to mark special occasions with fine jewellery remains strong,” Singh remarked.
