UAE Gold Buyers Shift Focus from Jewellery to Bars and Bullion

United Arab Emirates Jewellery News: Investment Over Ornamentation

In a noticeable shift in consumer behavior, shoppers across the United Arab Emirates are pulling back on gold jewellery purchases while ramping up investments in gold bars and bullion. This pivot reflects a broader economic anxiety triggered by geopolitical instability, rising global inflation, and a surge in gold prices.

Consumers in UAE are turning to gold bars and are abandoning gold jewellery purchases.
Image Credit: WGC

According to the latest World Gold Council data, gold jewellery demand in the UAE tumbled 16 percent year-on-year in Q2 2025—plunging to 7.7 tonnes from 9.2 tonnes a year ago. This marks the lowest quarterly figure in over two years. Even heavy discounting and reduced making charges failed to rekindle consumer interest. Meanwhile, this United Arab Emirates Jewellery News report reveals a striking 25 percent rise in demand for gold bars and coins over the same period, reaching 4.1 tonnes compared to 3.3 tonnes in Q2 2024.

Tourist Reliance and Wealth Preservation

Part of the jewellery sector’s woes stems from its reliance on tourism—a stream still recovering from global travel disruptions. Domestic demand hasn’t picked up the slack either, with residents also opting to safeguard wealth instead of splurging on adornments. High-net-worth individuals have especially been shifting towards bars, either by direct purchases or fractional investments through digital platforms.

As Andrew Naylor, head of Middle East and Public Policy at the World Gold Council, explains, “It’s all about high gold prices. The UAE is perhaps a bit more impacted because of the reliance on sales to tourists as well as to resident shoppers.”

Despite the surge in investment demand, overall gold consumption in the UAE still declined 5 percent year-on-year in Q2, standing at 11.8 tonnes. On a quarter-by-quarter basis, however, there was a modest 7.2 percent increase.

Skyrocketing Prices Change the Game

The root cause of this retail transformation is glaringly clear—skyrocketing gold prices. In Dubai, 24K gold now hovers above Dh397 per gram, with other varieties like 22K, 21K, and 18K trading at Dh368, Dh353, and Dh302.5 respectively. Globally, gold averaged a whopping $3,280 per ounce in Q2 2025, up from $2,338 in the same period last year—a staggering 40 percent increase.

As a result, consumers are adjusting their strategies. Many are gravitating toward lower-karat jewellery like 18K for occasional use while redirecting larger sums into investment-grade bullion. According to Naylor, “Middle Eastern gold demand in the second quarter largely reflected global trends. Jewellery consumption across the region declined 11 percent year-on-year, as high prices and persistent geopolitical instability dampened consumer sentiment.”

Coins Lose Their Sparkle

Interestingly, the gold coin segment—once a favored form of portable investment—also saw demand drop this quarter. Rising prices have put even small coin denominations out of reach for the region’s mass-affluent class. Still, gold bars remain a bright spot. In the UAE especially, ultra-wealthy investors continue to acquire bullion either directly or through digital avenues.

Globally, total gold demand reached $132 billion in Q2 2025, a 45 percent surge from the previous year. This spike was driven primarily by investor flows and safe-haven buying, even as jewellery volumes slid.

While gold continues to shine as a financial shelter in uncertain times, sustained high prices could further widen the divide between ornamental and investment purchases. Retailers may need to rethink strategies and offer more hybrid solutions—combining aesthetic design with investment value—to revive jewellery sales without losing out on investor interest.

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