Rush for gold in UAE as South Asians ring in the New Year

The New Year is celebrated by communities from India, Bangladesh and Sri Lanka who traditionally buy gold jewellery and enjoy a festive feast together.

Toufiq Ahmed, a salesman from Bangalore arranges gold necklaces and jewelry sets at the storefront of Kanz Jewels at the Gold Souk in Deira. Razan Alzayani / The National

DUBAI // South Asian residents yesterday welcomed in their New Year by buying gold jewellery and feasting with friends and family.

Expatriates, particularly Indians, snapped up gold as prices dipped to a 20-month low, buying trinkets and jewellery in all shapes and sizes as well as gold bars and coins.

Jewellers said the unusually high demand meant many stores ran out of stock.

"We sold what we would on three days over one day," said Thomas Scaria, head of corporate finance at the Joyalukkas Group. "No one expected this sort of price fluctuation.

"We ran out of gold bars on Saturday but have now restocked our supplies."

The price of 22-carat gold was Dh166.25 a gram yesterday.

Mr Scaria said the group's stores sold more than 150 kilograms of gold on Saturday, the eve of the South Asian New Year, which is based on the solar calendar and marks the end of the harvest season.

The celebration is marked by various communities in India, Bangladesh and Sri Lanka.

Despite the rush, some buyers were choosing to wait even longer before shopping for gold.

"I am waiting for the price to fall further," said Sandeep Menon, from India. "When the global markets open on Monday, we'll know whether prices will rise or fall further. If it does fall, I plan to spend about Dh10,000 on jewellery."

Malabar Gold reported sales "five times" more than usual, but bosses did not specify the value.

"We have had really good sales in the past two to three days since the gold prices fell," said Joshy Michael, marketing manager. "The main requirement of customers is jewellery. Gold coins and bars are only 10 or 15 per cent of our total sale."

He said the company's stores were prepared to meet demand.

Yesterday, lavish feasts, or sadhya, were served for Vishu, as the New Year festival is known among Indians from Kerala.

During the festival it is considered auspicious to wake up at dawn for the "first sight", or Vishukkani, of gold jewellery, money, fruits and vegetables, because this means there will be a prosperous year ahead.

Many businesses organised traditional 15-item vegetarian meals served on plantain leaves.

"We organised a celebration in our company," said Venu Kannan who works at a trading firm in Dubai. "We planned a sadhya for all our staff."

Bosses at Oasis Cuisine bakery hosted a lunch for 200 workers from all nationalities.

"We do this for every festival, be it Diwali or Eid," said Faisal Mohammed, the marketing manager. "We organised the lunch in our office because Vishu lunches are massive and need a lot of space."