Prime Highlights:

• Dubai gold prices went up by Dh4 per gram, sparking a change in demand.
• Hunters are now settling for lightweight jewellery and holding out for possible price declines.

Key Facts:

• The price for 22K gold rose to Dh368 per gram, and 24K reached about Dh397.5.
• Merchants indicate a 20–25% drop in gold jewellery sales starting from May 20.
• Stores are promoting offers on making charges to revive customer interest.

Key Background

Dubai’s gold market witnessed a notable shift this week as prices surged by Dh4 per gram, with 22K gold reaching Dh368 and 24K approaching Dh397.5. This sharp increase has prompted many residents and tourists to delay their purchases, hoping for a better deal before the upcoming Eid Al Adha and summer travel season.

Retailers have noticed that there has been a dramatic fall in jewellery sales—pegging it at about 20% to 25% since May 20, when there was an unexpected spike in gold prices. Consumers, particularly holiday travellers, are also becoming more conservative in their spending now. Most of them are either cutting down their budgets or opting for lower-priced, light jewellery items such as chains, rings, and pendants.

To meet this change, jewellery shops in Dubai are introducing appealing offers. Some stores are exempting making charges or offering heavy discounts to attract reluctant buyers back. Light jewellery collections are being promoted more vigorously, particularly in the 5–15 gram range, which are less pricey for price-sensitive buyers.

The price increase is attributed to global market forces, such as the fluctuation of the US dollar, interest rate speculations, and geopolitical events. Despite some easing of international gold prices following a strong dollar and fewer economic uncertainties, retail price adjustment in Dubai continues to lag.

Merchants feel gold has to drop below Dh365 a gram for it to restore sustained buying pressure. Consumers still view this level as an acceptable buying point. Lots of shoppers are watching closely in the hope of another decline before they make big-ticket purchases.

The sector hopes for a recovery near Eid, especially with Saudi and other Gulf-based tourists likely to arrive. But unless prices stabilize or fall marginally, bulk purchasing won’t return to pre-crash levels. Meanwhile, the priority for buyers and sellers alike continues to be lightweight gold pieces and value-oriented deals that accommodate tighter travel budgets.

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