Media coverage of the Dubai Shopping Festival (DSF)  taking place from December 26 2017 to January 27 2018 is agog with the possibility of the early days triggering  a  “gold rush”, particularly  between   December 26 and  December 31. This is because a 5%  VAT on gold will come into effect from January 2018; and the first few days of the festival are seen by consumers as the last chance to purchase jewellery before the VAT levies become applicable.

The raffles and other promotions are making the DSF particularly  attractive too.

In fact, during  the entire duration of the DSF, shoppers stand a chance to win 33 kilos of gold worth Dh 5 million.

“During 33 days of DSF, Dubai Gold and Jewellery Group’s promotion will choose 100 winners, including a mega winner on the final day raffle who can take home one kilogram of gold,” said one report. “Three lucky shoppers will win gold prizes every day — one 500gm gold bar and two 250gm bars.”

Shoppers who buy gold jewellery worth Dh 500 will be entitled to one raffle coupon; and those who buy diamond jewellery, pearl or watches worth Dh 500 will get two raffle coupons to take part in the daily draw, the report  said.

Meanwhile, jewellers are stocking up big for these first few days of the DSF, as they expect the major jewellery buying rush to take place on those days.

Many  feel that once the VAT comes into effect  it will impact  the jewellery consumer’s frame of mind and buying decisions. One jeweller was quoted in reports saying it will “make a huge difference for low to mid-range spenders”.

In the  initial months, the VAT on gold is expected to impact demand by around 30%; if not more. Reports suggest that a lot will also depend on whether the international gold rates remain stable.

There is a likelihood of the Dubai retail jewellery scenario undergoing some upheaval and change in the long term too. It is said a number of stores in the Gold Souk are up for sale; while others are contemplating reduction of inventories.