You can’t wear an ETF: Designers fight for Dhanteras gold

Dubai: Global gold ETFs recorded a record $31 billion in the third quarter, yet jewelry designers claim Indian families in the UAE will still purchase physical gold for Dhanteras. While ETF buying is on the rise, jewelry designers argue it caters to a different type of consumer. The World Gold Council (WGC) reports that physically backed funds or ETFs received $10 billion in September alone, with holdings increasing by 67 tonnes to a record 4,256 tonnes.

However, assets under management fell 7% to $574 billion or Dh2.11 trillion due to the decline in gold prices during the month. The year has not been smooth, as gold prices experienced fluctuations, with a notable rebound in August. ETF flows mirrored these price movements, with holdings peaking at 4,176 tonnes in February but then easing.

Outflows occurred in May and June, followed by a surge in July with $3 billion in inflows and another $18 billion in August. By the end of August, ETF inflows totaled $29 billion for the year. Indian funds attracted $496.2 million in September and $4.71 billion so far in 2026, ranking the country third worldwide. Indian investment demand rose 54% year-on-year in the first quarter, while jewelry demand by weight decreased by 19%, according to WGC data.

Wedding-related buying remained strong during the summer. Amreen Iqbal, founder of Piece of You Jewellery, asserts that physical gold still triumphs at Dhanteras. "The ritual, the blessing, and the act of receiving a tangible piece cannot be replicated on a screen," she explains. Some customers utilize both, she adds, but the products address different needs.

"Our customers are not buying price exposure; they are buying a milestone, a gift, or a piece of family history." Panagiotis Melekkis, the Cypriot founder of Panos Melekkis Jewellery, distinguishes between gold as an investment and gold as jewelry. ETFs and digital gold appeal to those seeking financial exposure, he notes, but they fall short when it comes to wedding days or family gifts.

"You cannot wear an ETF to your wedding, give digital gold as a beautiful piece of jewelry to your daughter, or pass it down through generations as a treasured family heirloom," Melekkis contends. Dhanteras and Diwali embody tradition and prosperity beyond a metal's price. "I don't see digital gold as a direct competitor to fine jewelry," Melekkis adds.

Rasha Mansour, a designer, acknowledges the strength of the investment numbers but remains cautious. "I would not interpret this as the end of physical jewelry," she states. Festival purchases symbolize prosperity and family continuity, she explains. Mansour sees opportunities for brands in meaning rather than metal. "An investment product can track gold; it cannot replace the personal significance of a piece of jewelry chosen to mark a moment or carry a story."

Dhanteras falls on November 6 this year. Designers are banking on buyers who own ETFs to still desire a piece they can hold, wear, and give as gifts. A lower gold price compared to last year offers an opportunity for shoppers to diversify their portfolios and loosen their purse strings.