All that glitters: Gold remains a safe haven for UAE investors despite record price

The National

a day ago

Rajitha Nair, an Indian expat in the UAE who purchases gold twice a year for the festivals of Onam and Dhanteras, says if bullion prices rise steeply again, she would consider waiting before buying but a small variation in rates wouldn't affect her decision.
Despite gold prices hovering at record highs, Ms Nair decided last month to buy new jewellery for her daughter and exchange old jewellery. She avoids buying lightweight jewellery for fear of breakage.
'When we saw the jewellery designs, they were appealing, so we did not consider waiting for prices to decrease further,' she says.
'The jeweller offered us a discount on the making charges, which helped because we pay a big amount in value-added tax. They even offered zero interest payment plans in tie-ups with banks, but we paid the full amount in one go.'
Ms Nair has also signed up for a gold investment scheme with a jeweller where she pays Dh500 per month for 11 months, the jeweller pays on her behalf for the 12th month and then she can purchase jewellery, coins or bars for the full amount at the end of a year.
Gold futures hit another record on Friday, reinforcing its safe-haven appeal at a time of market uncertainty over US President Donald Trump's tariffs and his move to tax bullion.
The precious metal was trading at $3,398.17 at 12.17pm UAE time on Sunday. Bullion has gained about 30 per cent so far this year and nearly 40 per cent from 12 months ago.
Washington has said it may impose duties on 1kg and 1oz bars – a category long assumed to be exempt from trade levies – despite the White House indicating in April that gold would be spared from tariffs.
In addition to the tariffs, persistent central bank demand, geopolitical tensions, sanctions, trade friction and further US dollar weakness are expected to continue supporting gold prices in the second half of the year, analysts have said.
Before Friday's surge, multiple research, including from the World Gold Council, Citi Research, Refinitiv and Byblos Research, have pegged gold to average $3,400 in the third quarter of 2025.
'Good investment opportunity'
Mohit Bablani, a UAE resident who closely follows gold market trends, believes the current situation presents a good investment opportunity for the safe-haven asset.
'Record gold prices will act as a deterrent to many consumers, but historically the precious metal is seen as a safe haven and will continue to remain that way. If you see last 10 years' trends, the gold price has been constantly increasing,' he says.
'In fact, customers should see this as an opportunity to buy gold now before the price crosses $3,500 per ounce. However, there are also options to invest in other financial products, which, in turn, invest in gold.'
He recommends consumers to buy gold bars and coins before prices shoot up ahead of the festive season. Bars and coins are easier to sell later and can also be exchanged for jewellery, Mr Bablani adds.
Jewellers' strategies to boost demand
Meanwhile, jewellery retailers in the UAE are adopting diverse strategies to attract customers amid record gold prices. They say that the elevated prices have influenced consumer behaviour, leading to shifts in demand and purchasing habits.
Gold demand has seen a mixed trend, according to Chandu Siroya, vice chairman of Dubai Jewellery Group and managing director of Siroya Jewellers.
'On one hand, we've observed strong interest from investors who see gold as a reliable store of value amid global economic uncertainties. This is particularly evident in the increased demand for gold bars and coins, which are often preferred for investment purposes,' he says.
'On the other hand, the demand for gold jewellery has been more sensitive to the price surge. Many consumers, especially those who are price-conscious, are adjusting their purchasing decisions.'
Mr Siroya says there has been a trend among customers towards buying lighter-weight jewellery pieces or designs that feature more precious gemstones to reduce the overall gold content.
Siroya Jewellers is focusing on curating new collections that feature intricate designs with less gold weight. This allows customers to purchase jewellery that is more affordable. The group is also seeing a growing interest in alternative products like lab-grown diamonds and lab-grown rubies, emeralds and sapphires, he says.
Watch: Dubai's gold traders say demand for raw product up amid broader sales slump
Dubai-based Tiara Gems and Jewellery is also adopting the same strategy of making lightweight jewellery and pieces with diamonds and gemstones to reduce the weight, according to Ashish Vijay, founder and owner. The group is also offering consumers the option of flexible payment plans.
'We also explain the long-term value of gold and its safe-haven role amid geopolitical issues to our customers,' Mr Vijay says.
' Gold demand is still high because it holds an emotional value, and people see it as a good investment now since it has given better returns than other asset classes.'
Agreeing with him, Mr Siroya says festive seasons and marriages still see a surge in demand, as gold remains a culturally significant part of these celebrations.
Locking rates, discount on making charges
Siroya Jewellers is also promoting 'gold rate protection plans' and other lock-in schemes, which allow a customer to pay a small deposit to fix the gold price for a certain period. This protects them from potential future price hikes, giving them peace of mind, particularly for planned purchases like weddings, Mr Siroya says. The jeweller also offers flexible payment plans to ease customers' financial burden, he adds.
With the high value of gold, many customers are also choosing to cash in or exchange their old gold jewellery for new designs.
'We are actively promoting attractive exchange programmes that allow customers to get the maximum value for their pre-owned gold,' Mr Siroya explains.
'Instead of discounting the gold price itself [which is dictated by the global market], we are focusing our promotions on reducing or waiving making charges. This provides a direct saving to the customer and helps stimulate sales.'
Amreen Iqbal, founder of wearable jewellery brand Piece of You, says the group has adjusted its procurement strategy and now sources in smaller batches and times purchases based on price trends.
Design planning now incorporates weight optimisation 'without compromising structural integrity', allowing the group to manage costs effectively while safeguarding margins, she says.
'Demand has remained steady in core segments, but we are seeing increased interest in lighter, high-design pieces, Ms Iqbal says.
'Our response has been to diversify product lines, offer greater customisation, and refine production efficiencies to offset material cost increases. This ensures we remain competitive without passing the full extent of price fluctuations on to customers.'
Titan's jewellery brand Tanishq has been innovating across multiple fronts, particularly in product design and value engineering, to address current market conditions, according to Aditya Singh, head of international jewellery business at Titan Company.
The jeweller's focus on lightweight jewellery has resonated well with customers who have aesthetic and budget considerations in mind. Additionally, categories such as diamond-studded and non-traditional gold jewellery have gained traction, offering consumers attractive alternatives, Mr Singh notes.
Although price sensitivity is natural during such periods, the desire to mark special moments with fine jewellery remains strong, he adds.