Gold Demand Holds Steady Amid Record Prices

Despite Record Prices, Gold Demand Holds – with Changes

Residents and investors in the United Arab Emirates have always had a special relationship with gold. Recent price increases – with the price of 24-carat gold breaking the Dh530 mark – have not deterred them but rather transformed their buying habits. Gold's popularity remains unbroken, only the approach has changed: more and more people are opting for lighter jewelry or partial, digital gold purchases.

Gold prices at the peak – yet demand thrives

This year has been exceptional for the gold market: prices have repeatedly reached new historical highs. In December, the price of 24-carat gold was Dh539.75, surpassing the previous high of Dh525.25 on October 21. Prices for 22K, 21K, 18K, and 14K gold also rose in parallel, reflecting a global increase in demand. Alongside gold, silver has also reached historical highs: its price exceeded $69 per ounce, especially noteworthy given the volatile markets of recent years.

Local buyers' reactions, however, were not restraint – rather adaptation. Buyers are still interested in gold, but in different forms and structures.

Transformation of purchasing habits

Traditionally, gold buying was considered a serious financial decision, especially when purchasing larger quantities. However, recent price increases have opened new avenues for residents and investors. Digital platforms have made partial gold buying possible, allowing users to save even small daily amounts and keep them in gold.

This model has become particularly popular among the younger generation, who are looking for long-term saving strategies but do not have large capital sums to invest at once. Regular small-value purchases via apps (e.g., weekly or monthly) enable anyone to gradually accumulate gold reserves.

Jewelry and preferences – lighter pieces, more diamonds

High prices have brought changes in jewelry purchases as well. Buyers are increasingly opting for smaller, lighter gold pieces – earrings, chains, bracelets – which satisfy aesthetic and traditional needs but contain less gold and are thus more accessible. Parallel to this, demand for diamond jewelry has grown, partly because their prices are less dependent on the current global gold value.

According to traders, most buyers anticipated the price increases and decided to purchase before further rises. This kind of conscious financial planning has become increasingly common among UAE residents.

New entrants to the investor market

Historical price records have attracted a new layer of investors. Many who previously hadn't considered gold as an investment asset are now buying for the first time – often starting with small amounts. With the spread of digital tools, it's no longer necessary to physically own gold, significantly lowering the entry threshold. This is particularly appealing to the younger generation, who are comfortable in a digital environment and open to new financial solutions.

UAE investors continue to view gold as a long-term asset. Gold's role is not just about short-term price gains: it continues to serve as a guarantee and refuge during economic uncertainties and geopolitical risks.

What drives the price increase?

Several factors underpin the global rise in gold prices. Geopolitical tensions, uncertainties surrounding global economic growth prospects, and the evolution of monetary policies all contribute to the appreciation of precious metals.

Central banks play a key role, having significantly increased their gold reserves in recent years. This demand is not speculative but structural, providing long-term stability for the gold market. Interest rate expectations have receded, replaced by a reevaluation of reserve assets.

Experts suggest that gold was also among the best-performing investment assets in 2025, and although many expected a pullback after the October peak, the year-end rapid rebound surprised analysts. Weak liquidity environments often amplify price movements at the year's end, but maintaining current levels indicates that demand for gold remains fundamentally strong.

Gold – a stable element of portfolios

Nowadays, gold is no longer just an accessory for a narrow group of investors but increasingly an essential part of widely used portfolios. In the shadow of global economic and political risks, gold remains a reliable, physically-backed asset. Investors increasingly regard it as a 'non-negotiable' asset in their long-term savings.

Conclusion

Gold demand in the UAE has not decreased despite record prices – it has merely transformed. Buyers have adapted to the new market environment: they choose lighter jewelry, buy partial quantities digitally, and build their gold reserves over the long term. Gold remains a stable store of value, a safe haven, and a target for investment, especially in such an uncertain global environment where seeking stability is one of the most important strategic considerations. Dubai and the entire UAE continue to play a key role in this process, where gold is not just an investment but a part of culture and identity.

(Based on opinions from gold market experts.)