Despite record gold prices, UAE customers continue buying, just differently

[Editor's Note: Want to know the gold rate in Dubai? Click here]

Gold continued its strong run on Monday, breaking record high rates twice in the same day. When markets opened, 24K gold stood at Dh529.75. By evening, it had climbed to Dh531.50. 

The rates of 22K, 21K,18K, and 14K also increased during the day to stand at Dh492.25, Dh472, Dh404.50 and Dh315.50. 

Earlier this year, on October 21, the price hit Dh525.25 before falling and rebounding. Local jewellers said that the continued price increases had prompted more buyers to shift to lighter pieces and diamond jewellery. 

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Spot prices stood at $4,422 at 6pm, up 1.8 percent from Sunday. Meanwhile silver also climbed 2.7 per cent earlier this morning to hit a historic high of $69.23. At 6pm, the prices stood at $68.82. 

Despite record prices, UAE customers continue to buy gold — though how they buy is changing, local experts said. “High prices haven’t stopped demand — they’ve changed how people buy,” said Ahmed Abdeltawab, CEO and co-founder of fractional gold purchase app O Gold. “Users prefer fractional purchases and regular accumulation rather than large lump-sum buys.”

Meanwhile, jewellers said that people’s preferences in consumer gold have also shifted. “Buyers are choosing lighter pieces,” said Amina Mohamad Ali, director of MFar Jewellers. “Diamond jewelry has also seen an increase in demand. The high gold prices have not really deterred people from buying. There has been an anticipation of the increase in prices, so customers have made purchase decisions independent of that.”

New investors

The record high prices are encouraging more people to enter the market, said Ahmed. “Record highs are attracting new and younger investors, with many starting with small amounts. Education, accessibility, and fractional buying are key drivers bringing first-timers into the market now.”

He said that most UAE investors take a long-term view regarding gold. “In the UAE, gold is still viewed as a store of value and hedge, especially during global uncertainty,” he said. “Short-term trading increases during sharp price moves, but accumulation remains dominant.”

Multiple factors

According to Ahmad Assiri Research Strategist at Pepperstone, it was multiple factors that contributed to the soaring prices rather than one single catalyst. “At the global level, macro uncertainty around growth prospects, geopolitics and ongoing fiscal issues have increased gold demand for managing portfolios effectively,” he said. “Central bank demand is one dominant anchor for the gold market, overtaking rate expectations factor. All these factors made gold the highest performing major asset this year.”

He added that although many experts were not expecting the yellow metal to hit record highs again in 2025, it wasn’t surprising. “Volatility has been a defining feature of gold this year, but the underlying trend has remained constructive,” he said.

“Into year-end, thin liquidity conditions can exaggerate price moves, yet the fact that gold has held above previous breakout levels points to strong underlying demand buying into strength. While many expected consolidations after the October highs, and it was the case for roughly two months, fewer anticipated the speed of the subsequent rebound. The move to fresh highs appears less about short-term speculation — although rewarding — and more about positioning ahead of the new year, with investors increasingly viewing gold as a non-negotiable holding within portfolios.”