Dubai: Gold prices have surged to historic highs, leaving UAE shoppers hesitant and pushing the country’s jewellery retailers to come up with fresh strategies to entice buyers. The price of bullion shattered the $3,200 per ounce mark just minutes ago, surpassing the previous record of $3,171 set only last evening UAE time.
This meteoric rise is being driven by heightened global uncertainty. Renewed tensions from the US-China trade war have rattled markets, with US stocks closing lower and Asian markets opening deep in the red. Adding to the turmoil is the weakening US dollar, further propelling gold’s rally.
With prices climbing at this pace, industry insiders say this is unlike anything they’ve witnessed before.
Investment Bars in Demand, Jewellery Sales Plummet
“The only interest we’re seeing now is for gold investment bars,” said Anil Dhanak, Managing Director at Kanz Jewels. “Jewellery sales have dropped drastically, and even the traditional gold exchange offers are not drawing interest.”
According to Dhanak, shoppers believe holding on to gold might bring them better value in the near future – and with prices performing the way they are, the sentiment appears justified.
“It’s no longer enough to call gold a ‘safe haven’ asset. Retailers will need to do a lot more to convince customers to make a purchase at these levels,” he added.
Promotions Alone Won’t Work
Jewellery wholesalers echo similar concerns. “Even dropping making charges to zero may not be enough at this point,” said one Dubai-based wholesaler. “The current price point is simply too high for comfort. We’d need to see a Dh20-Dh30 per gram drop before shoppers feel they’re getting a good deal.”
Tourists Also Staying Away
Tourist interest in gold shopping has also taken a hit. Despite the UAE still enjoying a 6% price edge over India (down from 15% in mid-2024), travellers are showing reluctance.
In India, for example, the current price for 22K gold stands at Rs 8,259 per gram. Even with the UAE’s 5% VAT refund—especially attractive to Saudi visitors compared to their 15% VAT back home—buyers are choosing to hold off.
“Everyone seems to be waiting it out,” remarked one jeweller. “No matter the advantage, right now, shoppers are more cautious than ever.”
