The new Dubai Gold Souk is “very much on track”, according to the chairman of Dubai Gold & Jewellery Group.
With more than 250 jewellery and non-jewellery retail stores, the souk is scheduled to open in phases. The first phase of the market will open its doors to the public by April 2021.
“The new gold souk is very much on track. A lot of new companies from around the world have signed the contract in January. We will be opening the first phase of the market by April 2021 and we will see full opening by July 2021”, said Tawhid Abdullah, Chairman, Dubai Gold & Jewellery Group.
Gold prices have seen historic highs in the last year with rate shooting up by 15 to 20%, making it a much sought-after commodity for investment. Although gold sales were down during the pandemic, the industry was amongst the first to recover.
With the many promotional schemes and campaigns to attract buyers, Dubai Shopping Festival too is playing an important role in boosting sales. “So far, our promotions are being received very well and currently with the gold prices being favorable to the current buyers, we are expecting a surge with the buying trend during this promotion. Some of the participating outlets have witnessed a 22-30% increase in sales”, he said.
VAT Impact
While the 5% VAT rate has been accepted and adopted by consumers in the UAE, Abdullah believes a rate increase could have an impact on sales.
“5% VAT has been accepted by the people, but we don’t want it to go any higher. I think in Saudi it has gone very high in one shot and it’s not positive for it to go so high”, he said.
The Government of the Kingdom of Saudi Arabia (KSA) had announced the increase of the VAT rate from 5% to 15%, which came into effect in July 2020.
“When VAT was introduced in Europe, the volume of the gold jewellery being sold was much lower than when it was un-VATed”, he concluded.
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