Source: Virtuzone
Gold prices in Dubai have remained at record highs, drawing the attention of serious investors and changing conventional shopping behaviour. The Dubai gold rate for 22K was very close (within Dh1) to the record high of Dh372 on the weekend. 25 per gram recorded on April 16. The 24K gold is back over the Dh400 per gram mark, riding the ongoing strength in international bullion prices.
It had been hoped that the price would remain under that level on April 19 as well, following a day when 22K gold had remained under Dh370 per gram for most of April 18. The latest surge has strengthened the perception of gold as an unwavering store of value, particularly between persistent geopolitical issues and global economic instability. International bullion prices also recently broke the $3,200-an-ounce threshold for the first time ever, driving the price surge in local markets even higher.
The world of gold buying hasn’t come altogether to a halt even at these lofty levels. In truth, several consumers within the UAE are still buying, especially those tagged as ‘smart money’ consumers. They are also seasoned investors who are opting for gold bars or, when they have to be more price-sensitive, gold coins, which they consider a more practical long-term investment compared with jewellery.
“Shoppers who once exclusively purchased gold jewellery are now increasingly turning their attention to buying gold bars, driven by its investment appeal,” said Shamlal Ahmed, Managing Director of Malabar Gold & Diamonds. “Whenever these regular gold shoppers find they have money to spare, they are putting it into bars.”
“Currently, 30% of our UAE shoppers are opting for bars and coins, whereas just months ago, that tally was at 8%. We have never seen such a switch happen.”
Other jewellery retailers also had very similar feedback to share “A sizable number of shoppers – those making regular investments in gold – do not want to spend on jewellery-making charges right now,” said a jeweller, who operates outlets in the Dubai Gold Souq as well as at some of the prestigious malls in the city.
The surge in prices has caused a shift in consumer preferences. Traditional jewellery sales have slowed, with buyers wary of paying premium prices for ornamental pieces. According to Anil Dhanak, Managing Director at Kanz Jewels, “The only demand from UAE shoppers is for gold investment bars.” This reflects an evolving trend toward purpose-driven, money-saving purchases over decorative or holiday-orientated shopping. And retailers are starting to feel it too. Promotional tools like no or low making charges can no longer lure buyers. Tourist buying previously a key driver of Dubai’s gold retail sector—has also declined, with visitors now more reluctant due to high price tags.
But some consumers are taking advantage of the high rates by trading old gold in for new. Such a strategy is a common practice among tourists and business visitors, who can, in addition, receive VAT refunds on gold purchases. Buyers are taking advantage of a little leverage in a bid for purer gold assets at a price.
For now, unless there is a considerable easing of global tensions or a correction in international markets, gold prices in Dubai will likely remain elevated. For now, there’s clearly been a shift towards strategic investment abundance, with gold bars and coins emerging as the go-to selection for the shrewd spenders.
