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UAE: Gold jewellery demand plummets 18% as yellow metal prices keep rising
Many residents sold their precious metal ornaments to take advantage of record high prices; many residents also switched to cheaper variants such as 18 carats due to affordability
- PUBLISHED: Sun 4 May 2025, 11:00 AM
UAE gold jewellery demand plunged 18 per cent to 7.9 tonnes in the first quarter of 2025, compared to 9.6 tonnes during the same period last year, as high precious metal prices weighed on consumer appetite.
Gold prices have been continuously rising over the past few quarters, reaching a record high last month when it touched $3,500 per ounce globally and Dh420 per gram in Dubai.
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In addition to high prices, India’s decision to cut import duty also impacted gold jewellery sales as Indian residents and tourists account for a good chunk of sales in UAE.
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Many residents sold their precious metal ornaments to take advantage of record high prices. Also, many residents switched to cheaper variants such as 18 carats due to affordability.
Gold prices closed at $3,241.36 per ounce over the weekend. In Dubai, 24K closed at Dh390.5 per gram, while 22K, 21K and 18K closed at Dh361.5, Dh346.75 and Dh297.0 per gram, respectively.
The rally this year was mainly driven by US President Donald Trump’s decision to improve tariffs on other countries which resulted in a trade war with other countries, mainly China.
But as the concerns around trade war ease, the safe-haven metal has been retreating, dropping nearly $260 per ounce.
Similarly, record high prices hit bar and coin demand in the UAE, falling 5 per cent to 3.1 tonnes compared to 3.3 tonnes.
Meanwhile, overall consumer demand in the UAE slumped 15 per cent 11.0 tonnes during the January-March 2025 period as against 12.9 tonnes during the comparative period.
“Demand in the Middle East eased by 5 per cent year-on-year, with strong growth in Saudi Arabia offsetting sharp declines across much of the region. The gold price was responsible for the bulk of the regional drop in jewellery volumes, with continued added pressure in the UAE from the cut in Indian import duty, which has hit Indian tourist demand,” said World Gold Council.
However, Saudi Arabia bucked the trend; consumer sentiment during the Eid festival was buoyed by the rising price and festive demand was strong.
“Gold investment demand in the Middle East remained resilient in Q1 2025, underpinned by continued geopolitical uncertainty and positive price expectations. Notably, Saudi Arabia saw a 15 per cent year-on-year increase in bar and coin demand, while jewellery demand in the Kingdom rose 35 per cent – bucking regional trends,” said Andrew Naylor, head of Middle East and public policy at the World Gold Council.
“Despite broader declines across the region, these figures highlight gold’s enduring appeal in the Gulf as both a store of value and a culturally significant asset. As the economic environment remains volatile, we expect investment interest across the region to stay firm in the months ahead,” he said.
Louise Street, senior markets analyst at the World Gold Council, said it’s been a bumpy start to the year for global markets as trade turmoil, unpredictable US policy announcements, sustained geopolitical tensions and a return of recessionary fears have created a highly uncertain environment for investors.
“In this context, investment demand for gold has paved the way for the highest level of first quarter demand since 2016,” he said.
