Shoppers in the UAE are increasingly buying gold bars and coins, while reducing their spending on gold jewellery, driven by rising global gold prices and economic uncertainty.

According to the latest data from the World Gold Council, gold jewellery demand in the UAE declined by 16 per cent year-on-year, falling to 7.7 tonnes in Q2 2025 from 9.2 tonnes in the same period last year. This marks the second consecutive quarterly decline in jewellery consumption.

In contrast, demand for gold bars and coins surged, rising 25 per cent year-on-year to 4.1 tonnes in Q2 2025, compared to 3.3 tonnes in Q2 2024. On a quarterly basis, demand jumped 31 per cent, reflecting a growing appetite for physical gold assets.

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Despite the uptick in investment demand, overall gold consumption in the UAE fell by 5 per cent year-on-year to 11.8 tonnes in the second quarter. However, it still registered a 7.2 per cent increase compared to the previous quarter.

As previously reported by Khaleej Times, gold prices in the UAE have climbed by approximately Dh100 per gram over the past year, largely due to rising global prices. This increase has been fuelled by ongoing geopolitical tensions, trade tariffs, and continued buying by central banks.

During the second quarter, gold traded at elevated levels, with 24K gold consistently above Dh400 per gram. As of Thursday morning, 24K gold was priced at Dh397.5 per gram in Dubai, up nearly Dh3 from the previous night. Other varieties were also trading high, with 22K at Dh368.0, 21K at Dh353.0, and 18K at Dh302.5 per gram.

The average gold price rose 40 per cent year-on-year, reaching $3,280 per ounce in Q2 2025, compared to $2,338 in the same period last year, according to the World Gold Council.

In response to record-high prices, UAE consumers are moving toward gold bars and coins for investment purposes and are increasingly opting for more affordable 18K jewellery for personal use, balancing aesthetic appeal with cost-effectiveness.

“Middle Eastern gold demand in the second quarter largely reflected global trends,” said Andrew Naylor, head of Middle East and Public Policy at the World Gold Council.“Jewellery consumption across the region declined 11 per cent year-on-year, as high prices and persistent geopolitical instability dampened consumer sentiment.”

Naylor added that investment in gold bars and coins across the region rose by 4 per cent year-on-year, though the UAE stood out with a significant increase as local investors sought a safe haven.“In other markets, some investors opted to cash in profits amid continued price rises,” he noted.

Looking ahead to the second half of 2025, Naylor expects gold to retain its allure across the Middle East, although sustained high prices could restrain consumer demand for jewellery.

Globally, total gold demand soared 45 per cent year-on-year to $132 billion in Q2 2025.“Investor flows were again the primary driver, motivated by safe-haven demand and the record price of gold. Central bank purchases remained strong, albeit slightly below recent years. While the volume of jewellery demand fell, its total value increased due to the high gold price,” the World Gold Council report concluded.

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