Dubai Gold Prices: Why UAE Residents Are Locking In Rates For Diwali And Navratri

(MENAFN- Khaleej Times) More UAE residents are turning to rate lock-in schemes and gold savings plans, allowing them to fix a price now and pay in instalments, rather than committing to a full purchase at whatever the rate happens to be on the day as gold prices reach nearly three-month high ahead of the Diwali and Navratri festivals.

Industry executives said the trend reflects a shift towards disciplined, planned buying, as customers increasingly prioritise price certainty over waiting for more favourable conditions.

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In Dubai, 24K and 22K gold prices were trading at Dh557.5 and Dh516.25 per gram, respectively, on Tuesday morning. globally, spot gold was trading at $4,626 an ounce.

Anil Dhanak, managing director of Kanz Jewels, said the jewellery chain has seen a noticeable increase in enquiries and participation in lock-in and monthly saving programmes compared with last year's festive season.

“The interest is particularly strong among customers who have a fixed festive jewellery purchase in mind and want to protect themselves from further price increases,” he said, describing the growth as“healthy rather than purely volume-driven.”

Chirag Vora, managing director of Bafleh Jewellers, said enquiries for gold saving schemes typically surge two to three weeks before festivals, with rate lock-ins becoming as much a part of festive planning as choosing the jewellery itself.

He expects demand to rise further this year, particularly for bridal jewellery and heavier traditional pieces, as customers look to pay as little as possible.

John Paul Alukkas, chief executive of Joyalukkas Jewellery, said the company has also observed a noticeable increase in enquiries and participation in its gold price lock-in programme compared with the same period last year, calling it evidence of“customers' growing preference for securing prices in advance” in a highly volatile market.

The Indian festivals Navratri will be celebrated around October 11 and Diwali in early November this year. Buying gold during Navratri is considered highly auspicious and a symbol of welcoming prosperity and divine blessings among Hindu religion followers.

Regional uncertainty

While elevated gold prices remain the primary driver, jewellers said the ongoing regional conflict has added to customer caution.

Alukkas said the uncertainty had contributed to greater awareness of gold as a safe-haven asset, with decisions increasingly shaped by price volatility alongside festive and wedding plans.

Dhanak said the conflict had contributed to“greater caution among consumers”, though he maintained that the high and volatile price environment remained the bigger factor.

Vora struck a similar note, saying customers“rarely spell out the reason” for locking in rates, but that regional and global uncertainty had added“another layer to what was already a strong instinct”.

Hedging against volatility

According to Dubai jewellery industry executives, lock-in schemes were increasingly being used as a hedge.

Dhanak said such mechanisms gave customers“greater predictability” and protection against paying substantially higher prices later, subject to scheme terms.

Vora noted that although prices had eased from earlier highs this year, they remained at unprecedented levels and had begun climbing again in recent weeks – precisely the environment, he said, in which lock-in rates“prove their value”.

Shamlal Ahamed, managing director of international operations at Malabar Gold & Diamonds, said under its 50 per cent Advance Plan, the UAE shoppers can pay half the gold value upfront and lock in the prevailing rate for up to three months, while the 100 per cent Advance Plan allows customers to secure the current rate for up to six months.

He said the schemes offered flexibility as well as protection: if prices rise during the lock-in period, customers complete their purchase at the lower locked-in rate, while if prices fall, they can buy at the lower prevailing rate instead.

Instalment structures

On typical scheme structures, Dhanak said tenures varied by retailer but that customers generally preferred manageable monthly instalments over long commitments, with flexibility in tenure and instalment size increasingly valued.

Vora said Bafleh Jewellers' most common structures ran up to 12 months, with shorter lock-in periods favoured by customers who had already identified a purchase, and longer savings plans more suited to bridal jewellery and larger festive purchases.

Retailers said they were placing renewed emphasis on structured saving and loyalty benefits this festive season.

Vora said Bafleh's Gold Savings Scheme and Gold SIP (Systematic Investment Plan) options allow customers to build up purchases through disciplined monthly contributions, earning bonus value instalments or waivers on making charges upon redemption during Diwali and Navratri.

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