Shoppers in the UAE are increasingly turning to gold bars and coins as an investment hedge, cutting back on jewellery purchases amid soaring global prices and ongoing economic uncertainty, new data from the World Gold Council has revealed.
Gold jewellery demand in the UAE dropped by 16% year-on-year in the second quarter of 2025, falling to 7.7 tonnes from 9.2 tonnes in Q2 2024. This marks the second consecutive quarter of declining jewellery sales. In contrast, demand for gold bars and coins jumped 25% year-on-year to 4.1 tonnes, up from 3.3 tonnes during the same period last year. Quarter-on-quarter, investment demand rose by 31%.
Overall gold consumption in the UAE fell by 5% year-on-year to 11.8 tonnes in Q2 2025, but this still represented a 7.2% increase compared to the first quarter of the year.
The shift in consumer behavior comes as gold prices in the UAE remain elevated, with 24K gold trading above Dh400 per gram for most of the second quarter. As of Thursday morning, the price stood at Dh397.5 per gram in Dubai, up nearly Dh3 from the previous night. Prices for 22K, 21K, and 18K gold also remained high, at Dh368, Dh353, and Dh302.5 per gram respectively.
According to the World Gold Council, the average global gold price surged 40% year-on-year to $3,280 per ounce in Q2 2025, up from $2,338 in the same quarter of 2024. The price hike has been driven by a combination of global geopolitical tensions, persistent trade frictions, and continued central bank purchases.
“Middle Eastern gold demand in the second quarter largely mirrored global trends,” said Andrew Naylor, Head of Middle East and Public Policy at the World Gold Council. “Jewellery consumption across the region declined 11% year-on-year, as high prices and geopolitical instability affected consumer confidence.”
However, the UAE stood out for its sharp increase in investment demand. “Local investors are clearly looking to physical gold as a safe-haven asset,” Naylor added. “In contrast, some investors in other markets have started cashing in profits due to the sustained price rally.”
With consumers becoming more price-conscious, many in the UAE are also shifting to 18K gold jewellery, which offers a more affordable alternative while retaining aesthetic appeal.
Looking ahead, Naylor expects demand for investment gold to remain strong in the second half of 2025, while high prices may continue to suppress jewellery sales.
Globally, total gold demand rose 45% year-on-year to $132 billion in Q2 2025. The World Gold Council noted that investor demand and central bank purchases were the main drivers, despite a dip in physical jewellery consumption by volume.
