Gold Demand in UAE Strong Despite Rising Prices
As Diwali approaches, gold prices in the UAE are experiencing significant fluctuations, yet demand remains robust, particularly among Indian expatriates. Despite the rising costs, shoppers are actively purchasing gold, albeit in smaller quantities and lighter designs. This trend reflects a blend of cultural significance and economic strategy as consumers navigate the current market conditions.
Current Gold Prices in the UAE
Over the weekend, the price of 24K gold in the UAE ranged from Dh510 to Dh512 per gram, while 22K gold was priced between Dh472 and Dh474. These figures follow a recent peak where 24K gold reached Dh523 and 22K hit Dh485 before a slight decline of Dh13. Retailers report that festive demand is strong, with many shoppers taking advantage of exchange deals to mitigate costs.
Trends in India’s Gold Market
In India, gold prices are on an upward trajectory, with forecasts from ICICI Bank Global Markets suggesting that prices will remain firm throughout 2025. Analysts predict that gold could range between ₹1.20 lakh and ₹1.35 lakh per 10 grams, potentially rising to ₹1.30 lakh to ₹1.45 lakh in the first half of 2026. This outlook is contingent on the Indian rupee maintaining a value between ₹87 and ₹89 per US dollar. As of the latest data, the rupee was trading at ₹87.95 against the dollar and ₹23.84 against the dirham.
Factors Influencing Gold Prices
The Multi Commodity Exchange (MCX) currently lists gold at approximately ₹1.31 lakh per 10 grams, reflecting a 16% increase over the past month. This rise is attributed to a combination of a strong global market and a depreciating rupee. Analysts anticipate that prices could reach ₹1.50 lakh per 10 grams in the near future, driven by increased central bank purchases and strong demand from markets in China and Japan.
Despite the higher prices, UAE retailers are witnessing consistent customer traffic. Shoppers are particularly interested in purchasing gold for weddings and gifts, benefiting from Dubai’s lower making charges and transparent pricing structures. This environment positions gold as a secure investment, especially for expatriates who view it as a hedge against inflation.
FAQs
What are the current gold prices in the UAE?
As of the latest update, 24K gold is priced between Dh510 and Dh512 per gram, while 22K gold ranges from Dh472 to Dh474.
How are gold prices expected to trend in India?
ICICI Bank Global Markets forecasts that gold prices in India will remain firm, potentially reaching between ₹1.30 lakh and ₹1.45 lakh per 10 grams in the first half of 2026.
Why is gold considered a safe investment during Diwali?
Gold is viewed as a stable, inflation-resistant asset, making it a popular choice for investment during the festive season, especially among expatriates in the UAE.
Conclusion
In summary, gold demand in the UAE remains strong as Diwali approaches, despite rising prices and a weakening rupee. Retailers are adapting to the market by offering competitive pricing and lighter jewelry designs. As the situation evolves, consumers will continue to monitor both local and international trends to make informed purchasing decisions.
The cultural significance of gold during Diwali, a major festival for many Indian expatriates, plays a crucial role in sustaining demand. Traditionally, gold is associated with prosperity and good fortune, leading families to invest in jewelry and other gold items as part of their celebrations. This cultural practice is further reinforced by the custom of gifting gold, which enhances its desirability during the festive season.
Additionally, the UAE’s strategic position as a gold trading hub contributes to its vibrant market. The country benefits from a well-established infrastructure for gold trading, including numerous retailers and a competitive marketplace that attracts both local and international buyers. This accessibility allows consumers to navigate price fluctuations more effectively, as they can compare offerings from various retailers to find the best deals.
Furthermore, the global economic landscape, including geopolitical tensions and shifts in monetary policy, continues to influence gold prices. Investors often turn to gold as a safe haven during periods of uncertainty, which can lead to increased demand and price volatility. As the market evolves, both consumers and retailers will need to remain vigilant in adapting to these external factors while making informed decisions regarding their gold purchases.
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Dubai Shoppers Adapt Jewelry Trends Amid High Gold Prices
