UAE shoppers embrace diamond price protection as gold hits record highs 

The price protection scheme is still limited to a few retailers, its popularity, although, is growing as customers demand such assurances for diamond purchases 

Dubai: With gold prices nearing an unprecedented $2,600 an ounce, jewellery shoppers in the UAE are increasingly turning to diamond-studded pieces as a viable investment option. Leading jewellers are now offering full or near-full resale value guarantees on diamond jewellery, encouraging consumers to consider alternatives to gold, which has reached $2,586 an ounce, surpassing its previous record set on September 13. 

Joy Alukkas, Chairman and Managing Director of Joy Alukkas Jewellery, noted that the perception of diamonds has shifted significantly. “Historically, the lower resale value of diamond jewellery was a major drawback for buyers. Now, with retailers introducing price protection schemes for diamond trade-ins, shoppers are feeling more reassured,” he said. 

Currently, jewellers offering price protection require customers to return diamond pieces bought from their stores, although some may accept trade-ins from other retailers, albeit with a longer exchange process. While this price protection scheme is still limited to a few retailers, its popularity is growing as customers demand such assurances for diamond purchases. Gold remains the preferred choice for jewellery in the UAE, accounting for approximately 70-80% of sales. However, diamonds have gained traction, rising from 5-10% of the market share in the early 2000s to around 15-20% today. 

The soaring gold prices have necessitated this shift, as many consumers find their purchasing power limited. Abdul Salam K. P., Vice-Chairman of Malabar Gold & Diamonds, emphasized that the majority of gold buyers seek investment opportunities. “We had to demonstrate that diamonds are also a safe investment,” he said, highlighting the importance of the price protection offer in building consumer confidence. Malabar Gold & Diamonds is one of the first jewellers in the UAE to introduce diamond price protection, providing customers with 100% value back on diamonds or gold purchased from them. For cash exchanges, the buyback rate stands at 90% of the prevailing price. 

As consumer preferences evolve, younger buyers are increasingly entering the jewellery market, looking for assurance regarding the value of their purchases. Moreover, the UAE is becoming a popular destination for wedding jewellery, further boosting sales across all categories, including diamonds. Industry experts note that the introduction of buyback guarantees represents a significant shift in the UAE’s jewellery market. Arjun Dhanak, Director at Kanz Jewels, remarked, “Traditionally, diamonds have not matched gold’s liquidity and resale value. The emergence of buyback guarantees is enhancing their status and providing greater security to customers.” 

Despite the new guarantees, experts advise shoppers to retain their purchase receipts and diamond certifications to ensure a smoother exchange process. Kalyan Jewellers offers a 100% value on diamond jewellery exchanges and a 90% buy-back rate for cash returns, further solidifying the trend towards diamond investments in the region. As the UAE jewellery market adapts to changing consumer needs, the growing acceptance of diamond price protection could redefine investment strategies for shoppers looking to diversify beyond gold. 

Retail Jeweller ME News