Soaring gold prices are impacting consumers in the UAE. The demand for gold jewelry in the country decreased by 18% year-over-year during the first three months of 2025, dropping to 7.9 metric tons from 9.6 metric tons in the same period in 2024, as reported by the World Gold Council.
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The sharp increase in the cost of this premium metal—which reached up to $3,500 an ounce worldwide and AED420 per gram in Dubai recently—has dampened buyer interest. Numerous people living in the UAE responded to the spike by liquidating their gold items, whereas some opted for more affordable choices such as 18-karat jewelry to remain under budget constraints.
Additionally, India’s reduction in import duties has had a dual impact. Since Indians represent a significant segment of the UAE’s gold consumers, they are increasingly likely to purchase jewelry domestically rather than abroad. This shift has led to a decrease in buying driven by tourists visiting the UAE.
Gold closed over the weekend at $3,241.36 per ounce, while in Dubai, 24K gold stood at Dh390.5 per gram. Prices for 22K, 21K, and 18K settled at Dh361.5, Dh346.75, and Dh297.0, respectively.
It's not just jewellery that's feeling the pressure. Bar and coin demand in the UAE also dipped by 5%, reaching 3.1 tonnes from last year’s 3.3 tonnes. Overall gold consumer demand dropped 15% to 11.0 tonnes.
"The significant decline in jewelry volumes across the region can be attributed mainly to fluctuations in gold prices," stated the World Gold Council, highlighting an additional effect from decreased demand originating in India within the UAE market.
Nevertheless, not all markets have declined. In Saudi Arabia, the situation was different as Eid spending increased jewelry demand by 35%, alongside a rise of 15% in investments in bars and coins.
Even though there have been overall decreases throughout the area, these numbers demonstrate gold's lasting attractiveness in the Gulf as both a means of wealth preservation and an important cultural possession," stated Andrew Naylor, who leads the Middle East and Public Policy division at the World Gold Council. "Given the ongoing instability in the economy, we anticipate sustained investment interest within this region for the coming months.
Louise Street, a senior markets analyst at the World Gold Council, encapsulated it well: "The beginning of this year has been quite turbulent... however, the investment interest in gold has led to the highest first-quarter demand since 2016."
Despite prices moderating somewhat and global uncertainties decreasing, UAE purchasers might remain wary—unless the allure of gold proves irresistible.
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The post for this article was made on financeforwardhq
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