Dubai, UAE – The glitter of gold has long held a special place in the hearts of residents and expatriates in the United Arab Emirates. From bridal sets in Deira’s bustling Gold Souk to investment-grade bars purchased by seasoned traders, the yellow metal has been both a cultural staple and a financial safeguard. But in recent weeks, the shine has become intimidating. Gold prices have soared to record highs across the Emirates, sending shockwaves through the market, worrying consumers, and forcing retailers to adapt with discounts and creative offers.
Prices at Record Levels
On [recent date], the price of 24-carat gold in Dubai touched AED [X] per gram, a new record that stunned even veteran jewellers. Analysts attribute the surge to multiple global factors: economic uncertainty, fluctuating oil markets, inflation concerns in major economies, and persistent geopolitical tensions. Gold, traditionally seen as a “safe haven” during turbulent times, has attracted massive demand in international markets, inevitably pushing prices higher.
While investors might see these figures as a sign of gold’s enduring strength, everyday buyers in the UAE—especially those shopping for weddings, festivals, or personal adornment—are finding the new rates discouraging.
Buyers Step Back
In the traditional gold markets of Dubai and Sharjah, the usual weekend crowds have thinned. Shopkeepers who once catered to steady streams of eager customers now describe hesitant buyers walking in, browsing, and leaving without making purchases.
“I came to buy a necklace set for my daughter’s wedding,” said Priya Menon, a long-time resident of Sharjah. “But when I saw the prices, I decided to wait. It’s almost 25 to 30 percent higher than what we paid just two years ago.”
This hesitation is echoed across the UAE, where gold purchases are deeply tied to cultural practices. Indian, Pakistani, Arab, and African families all regard gold jewellery as both an essential investment and a symbol of celebration. With prices touching the sky, many are postponing purchases, reducing budgets, or opting for lighter designs.
Shopkeepers Under Pressure
The strain is evident on retailers too. Dubai’s famous Gold Souk, usually buzzing with tourists and residents bargaining for bangles, has adopted a quieter tone. To attract buyers, many jewellers are offering innovative discounts.
“Gold price is not in our hands,” said Ahmed Khan, owner of a long-established jewellery store in Deira. “But what we can do is reduce our making charges, offer buy-back guarantees, and give seasonal promotions. Right now, we are offering zero-making charges on selected items. This is the only way to keep customers engaged.”
Prominent jewellery chains have also joined the trend, advertising special deals such as free gifts with purchases, loyalty points, and discounts on diamond or gemstone settings. Some shops are experimenting with lighter, contemporary designs that use less gold but still look fashionable, hoping to appeal to younger buyers who want style without the heavy price tag.
The Investor’s Dilemma
While retail jewellery buyers hesitate, another segment of the market sees opportunity. Investors in the UAE, particularly high-net-worth individuals, are using the rising trend as confirmation that gold remains a safe bet against inflation and currency fluctuations.
“Every spike in gold prices has two sides,” explained Dr. Noura Al Mansoori, a financial analyst in Abu Dhabi. “Retail customers feel priced out, but investors feel reassured. They are increasing allocations to gold ETFs, bullion, and coins. For them, the high prices confirm that gold is still the ultimate hedge.”
This divide between jewellery buyers and investors is widening, leaving retailers in a difficult balancing act.
Festive Season Worries
The timing of this price surge could not be more delicate. The UAE is entering a season of weddings and festivals, including Diwali for Indian residents and the upcoming year-end celebrations. Traditionally, these months see a surge in gold sales, often keeping jewellers busy late into the night.
“This is usually our peak season,” said Sunil Verma, manager of a large chain store in Karama. “But this year, we fear sales will be lower. We rely heavily on tourists and expats buying gifts and jewellery during this time. If prices remain high, many will switch to smaller items or avoid buying altogether.”
Psychological Barrier
Experts also highlight the psychological barrier that comes with round-number price jumps. When gold crosses a symbolic level—say AED [X,000] per 10 grams—many buyers automatically perceive it as unaffordable, regardless of their actual budget.
“In consumer psychology, crossing a threshold price creates alarm,” said Dubai-based economist Feroz Merchant. “Even if the difference is only a few dirhams per gram, buyers react strongly. That’s why jewellers are rushing with discounts: to cushion the psychological shock.”
Shopkeepers Get Creative
Some jewellers are turning to digital innovations. Online platforms are offering virtual try-ons, easy installment plans, and gold savings schemes where customers can gradually accumulate small quantities until they can afford larger purchases.
“We know gold is a lifetime purchase,” said Farah Ali, director of an e-commerce jewellery brand in Dubai. “So we let customers lock today’s prices with a down payment and pay the rest later. This gives them confidence and helps us keep sales moving.”
Others are highlighting the “investment angle,” marketing jewellery not just as fashion but as a long-term asset. Campaigns now emphasize gold’s resale value, global liquidity, and stability compared to other commodities.
Government Perspective
The UAE government has long encouraged the gold and jewellery trade, making Dubai a global hub for bullion and ornaments. Authorities are closely watching the impact of rising prices on tourism and retail. While no direct intervention is expected—since prices are tied to global markets—industry experts believe that policies supporting tourism, shopping festivals, and tax-free incentives will help balance the slowdown.
Dubai Shopping Festival, for example, may take on new importance this year, with jewellers preparing aggressive campaigns to entice both locals and international visitors.
Looking Ahead
Analysts remain divided on the future trajectory of gold prices. Some believe that ongoing geopolitical risks and global inflation will keep prices high for months, while others predict a correction once global economic confidence improves.
For now, buyers in the UAE remain cautious. Many are waiting for even a slight dip to resume their purchases, while jewellers are hoping that discounts and innovative offers will help keep the glittering trade alive.
“Gold has always been in demand here,” said Ahmed Khan, the Deira jeweller. “People may delay, but they will not abandon it. Weddings will happen, festivals will come, and gold will remain part of our lives. We just need to be patient until customers adjust to the new reality.”
Conclusion
The story of gold in the UAE is one of resilience. Despite alarm bells ringing among buyers and the pressure on retailers, the deep cultural and emotional connection with the yellow metal ensures its enduring place in society. Prices may touch the sky, but for many, gold will remain a dream worth chasing—whether through smaller purchases, innovative schemes, or simply waiting for the right time.
