Rising Gold Trend in the UAE: Explained

Why are More People Buying Gold in the UAE?

In recent weeks, the price of gold has reached a record high, igniting renewed interest in gold in the United Arab Emirates. Local residents and investors are increasingly turning to gold as a reliable store of value, especially during periods of rising inflation, declining bank interest rates, and ongoing economic uncertainty. Jewelry shops and dealers in Dubai and other emirates have noticed a surge in interest: more people are converting their savings into the yellow precious metal.

Record Prices – A New Wave of Investors

On Monday, the price of gold reached an all-time high of $3,949 per ounce, marking an increase of over 1.5 percent during evening trading. On the UAE domestic market, prices have also surged: the price per gram of 24-karat gold reached 475.25 dirhams, while 22-karat gold rose to 440 dirhams. This is a significant change for those who were previously interested in the precious metal, now seeing their decision further validated.

Inflation, Rate Cuts, and Gold

Several economic factors are driving the interest in gold. With global inflation on the rise, many fear that the value of money held in banks will gradually erode. This process is further fueled by the U.S. Federal Reserve's rate-cutting policy, followed by Gulf countries including the UAE. As deposit interest rates fall, traditional savings methods become less attractive, prompting residents to seek alternative solutions.

In this context, gold is both a liquid investment and a long-term value preserver. It is easily sold and quickly converted to cash in any market, and its price trends over the years indicate an upward trajectory in the long term.

The Move Towards Practical Purchases

Jewelers in the UAE report that purchasing habits are also changing. While many used to choose jewelry based on design and aesthetics, economic benefits now play a key role in decisions. People seek practical gold jewelry that can be worn but also sold if market prices are favorable.

It is also not uncommon for people to purchase gold bars for long-term savings purposes. These are typically stored in a secure place and held for future sale. Others prefer wearable jewelry, particularly bracelets, chains, and rings made from 22 and 24-karat gold.

Differences by Nationality

Dubai's diverse population shows variance in purchasing habits. Arab buyers generally seek jewelry that proportionally contains gold and gemstones – typically 60-70% gold and 30-40% diamonds or other precious stones. On the other hand, Asian communities prefer pure gold with the fewest adornments possible. For them, gold is primarily an investment, not a decoration.

Growing Awareness

Another interesting trend in the gold market is the growing number of conscious buyers. While previously many were only concerned with form or color, more people now monitor daily price trends and adjust their purchases accordingly. This is particularly true in the digital age, where gold prices can be tracked at any moment via a mobile app or website.

It is also a known fact that the making charges applied when purchasing jewelry become worthwhile in the long run if gold prices continue to rise. This idea is increasingly present in the minds of buyers, making economic rationality as decisive as beauty.

Combining Online Investments with Gold

Alongside gold purchases, many are also venturing into online investments, taking advantage of the UAE's modern digital infrastructure. However, gold remains a more reliable and less risky option for those who do not wish to engage in daily price analysis. Gold is simple, understandable, and has been a proven store of value for millennia – a source of comfort for many.

Looking Ahead

Some analysts are already predicting that the price of gold could reach $5,000 per ounce in the near future if current economic trends – inflationary pressures, geopolitical tensions, and monetary easing – continue. This could further boost purchasing interest, especially in countries where the population traditionally values gold, such as the UAE.

Thus, gold is not just a beautiful gift or luxury item but increasingly appears as a strategic investment in people's minds. UAE buyers are leading in this: they are conscious, well-informed, and timely in recognizing opportunities.

The heightened interest in gold is not only an economic phenomenon but also a cultural and psychological process based on the desire for security, the search for stability, and preparation for the future. And as it stands, this trend seems likely to persist for a while.

(Source of the article based on reports from Arab jewelers.)