Gold price in Dubai hits record Dh358 per gram
Jewellery retailers struggle to attract hesitant buyers
DUBAI: The price of gold has surged to unprecedented levels in Dubai, hitting Dh358 per gram for 22-karat gold, following an explosive rally in international bullion markets.
This surge mirrors global trends, with the precious metal crossing $3,200 per ounce for the first time in history – surpassing the previous high of $3,171 set just a day earlier.
Within just four days, Dubai’s local gold rate has risen by Dh24 per gram. The comparable 22K gold price in Saudi Arabia currently stands at SR361 per gram.
Retailers across the UAE are grappling with cautious consumers, who are now reluctant to purchase jewellery at these inflated rates.
Market impact
The dramatic price movement is attributed to mounting global uncertainties, including the intensified US-China trade tensions. Recently, the United States imposed a 125 percent tariff on Chinese imports, while suspending other tariff actions for 90 days. This move rattled investor confidence and sent global equity markets into disarray. US stocks closed lower, and Asian markets opened sharply down, feeding into the demand for gold as a traditional safe-haven asset.
A weakening US dollar has further reinforced gold’s appeal, contributing to the rapid escalation in prices. As a result, investors and shoppers in the UAE have shifted their focus from ornamental purchases to bullion, with gold bars seeing significantly more demand than crafted jewellery.
Slowing retail sales
Jewellery sales have declined considerably in the face of soaring prices. Many UAE shoppers are waiting for a potential drop of Dh20 to Dh30 per gram before re-entering the market. Even promotional strategies like zero making charges are proving ineffective as consumers delay purchases in anticipation of a better entry point.
Despite Dubai having a six percent price advantage over India – down from fifteen percent in mid-2024 – tourists and residents alike are expressing reluctance to invest in jewellery. Indian prices for 22K gold currently sit at Rs8,259 per gram, and while tourists from Saudi Arabia benefit from VAT refunds in the UAE, price sensitivity remains high.
Gold buying trends
Following a brief dip in gold rates earlier this week, some residents seized the opportunity to invest. Dubai Jewellery Group reported that 24K gold opened at Dh386.5 per gram on Friday, up from Dh376.5 the day before. Similar trends were noted for other categories, with 22K, 21K, and 18K climbing to Dh358, Dh343.25, and Dh294.25 respectively.
Though this temporary fall in price prompted some to buy, the trend quickly reversed as prices shot up again, discouraging sustained buying. One investor reportedly made a Dh1,200 profit in just 24 hours after purchasing gold coins during the brief low, underscoring the volatility of the current market.
Jewellery stores observed increased customer activity during the fleeting price dip, with many locking in lower rates in preparation for upcoming events such as Akshaya Tritiya. However, most buyers continue to adopt a cautious approach amid fluctuating prices and ongoing geopolitical uncertainties.
While some retailers have seen short-lived boosts in sales during minor dips, the overall trend indicates hesitancy. The future of gold pricing remains tightly linked to developments in global trade policy and currency dynamics, particularly the dollar’s performance.