Gold sales are shining bright for local traders this Diwali season in an otherwise dull year.
Customers have flocked to jewellery stores on Abu Dhabi's Hamdan Street, commonly frequented by Indian expats, to haggle over precious adornments. This year, thrifty customers have opted to purchase gold coins rather than necklaces and earrings as gifts for family and friends as prices of ornaments rise in tandem with the cost of the metal commodity.
"It was so crowded and claustrophobic", said Reema Bhatia, a banker in Abu Dhabi, who headed to the shops in search of gold coins.
In the lead-up to Diwali, the Indian festival of light, some gold stores remained open until as late as 1am, as customers arrived in droves to buy ahead of the auspicious period.
"It has been really good," said Vibin Menon at Sky Jewellery. "We are getting double the number of traffic and double the sales during regular days."
"For Indians, this is the lucky time to buy gold," said Andrew Ignatious, the showroom manager at Joyalukkas. "Based on the amount of purchases so far, we are expecting a 30 per cent increase in sales compared to last year's Diwali."
Up to 100 people a day have walked into the Joyalukkas store on Hamdan Street, with the vast majority making purchases, compared with an average of 30 to 40 people on regular days, said Mr Ignatious.
The bull run in the gold market, fuelled by stimulus measures by governments and central banks around the world to help to avert a global recession, has dampened consumer demand for jewellery. Customers are making fewer purchases because of higher prices.
"The price has become more expensive and more steep," said Ms Bhatia. "We didn't buy jewellery sets this year. But as a celebration, we decided to buy gold coins. It's auspicious."
Diwali has brought a small windfall for jewellers at a time when they are struggling for business.
"The sales have been OK if we compare it to previous years, but I can't say it's good," said Mr Ignatious at Joyalukkas. "Business has been generally slow."
At Damas, customers rushed to buy gold items yesterday, the last day of the retail shop's Diwali promotion, amid hopes that raffle tickets handed out with purchases will reap a big cash prize or a Mercedes GLK car.
Gold for immediate delivery fell 0.3 per cent to US$1,724.90 an ounce in yesterday's trading. The metal touched a record $1,921.15 an ounce in September last year.
The precious metal, whose cost increased 70 per cent from December 2008 through June 2011, is forecast to reach $2,000 an ounce next year, according to Deutsche Bank.
"Gold, out of all the metals, will be the best performer," Jeremy East, global head of metals trading and structured inventory product at Standard Chartered told Bloomberg.
"The biggest driver of gold will be the ETF," a reference to exchange traded funds that track gold prices.