UAE Shifts to Gold Bars Amid Jewelry Decline

Gold Bars and Coins Gaining Popularity in UAE – Why Jewelry Demand is Falling?

A significant shift is noticed in the UAE gold market: while the demand for gold jewelry is decreasing, interest in investment gold bars and coins is on the rise. According to the latest data from the World Gold Council, demand for gold jewelry fell by 16% year-on-year in the second quarter of 2025, from 9.2 tons to 7.7 tons. Meanwhile, physical gold investments, particularly bars and coins, showed a 25% increase, reaching 4.1 tons, indicative of a strengthening investor pursuit of security.

Gold Prices at Historic Highs

The main reason behind this shift is the steep rise in gold prices. Over the past year, the price of 24-carat gold has increased by about 100 dirhams per gram, owing to the global price surge. The growth is also driven by geopolitical tensions, international trade tariff measures, and central bank gold purchases. In the second quarter of 2025, the average price of gold per ounce reached $3,280, which is 40% higher than the same period in 2024.

In Dubai, the price of 24K gold regularly exceeded the 400 dirham/gram level, recently standing at 397.5 dirhams according to the latest morning rate. The 22K, 21K, and 18K variants also traded at high levels, priced at 368.0, 353.0, and 302.5 dirhams/gram, respectively.

Why Choose Bars and Coins?

Investors increasingly opt for gold bars and coins as they are more liquid, easier to store, and have a stronger value preservation role compared to jewelry. While purchasing gold jewelry is partly about aesthetics and tradition, bars and coins primarily attract as secure savings.

Among buyers, there's also a trend of preferring cheaper yet still appealing 18K gold jewelry over the more expensive 22K and 21K pieces. This trend illustrates how consumers balance costs with their attraction to gold.

Reflection of Global Trends in the Region

In the Middle East overall, demand for gold jewelry has declined by 11% year-on-year. However, the UAE stands out in the region with a surging interest in investment gold. While investors in other countries have realized profits after price increases, UAE investors have continued to increase their gold exposure.

According to World Gold Council analysis, global demand for gold rose to $132 billion in the second quarter of 2025, a 45% increase. The growth was mainly driven by investor inflows and record-high gold prices, while central bank purchases also remained significant.

Outlook for the Second Half of 2025

In the coming months, gold is likely to remain an attractive investment target in the region. However, high prices are expected to continue to curb consumer demand for jewelry. Based on trends, it can be stated that the UAE population increasingly regards gold as a safe haven asset, not just as an ornament or gift.

Summary

Amid changing market conditions and global uncertainties, gold purchasing habits in the UAE are also transforming. Buyers are seeking long-term security, evident in the remarkable growth in demand for gold bars and coins. Jewelry is taking a back seat, while physical gold remains a stable store of value—especially in such a dynamically changing world as we live in today.

(Source: Based on the latest data from the World Gold Council.)