Dubai gold inches higher with shoppers watching near-record levels

Duibai: UAE gold prices inched higher on Monday even as global bullion markets turned volatile after China removed a key tax rebate that had supported retail demand.

Retail prices for 24-karat in the UAE stood at Dh482.25 per gram, up from Dh481 on Friday. The widely popular 22-karat variant climbed to Dh446.50 from Dh445.25 earlier. Traders said the moderate rise reflects steady local demand and the delayed effect of global price swings filtering into the domestic market. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Internationally, gold slipped below 4,000 dollars an ounce after Beijing ended a long-standing rebate that allowed many retailers to offset value-added tax on gold purchased from the Shanghai Gold Exchange and Shanghai Futures Exchange. The policy shift reduces the benefit for firms that sell directly to consumers or process gold into jewellery, a sector that has been a major growth driver for physical demand this year.

Bullion for immediate delivery fell as much as 1% before trimming losses, while Chinese jewellery stocks dropped sharply. Under the new rules, which run until the end of 2027, only exchange members selling investment-grade gold retain the full tax offset.

When exchange members and non-members produce non-investment gold such as jewellery or industrial products, they can now offset only 6% of input VAT instead of 13% previously. The adjustment applies to non-members that buy directly from the exchanges as well.

The change comes after gold surged to record levels in October, supported by strong buying from retail investors, central banks and safe-haven flows. Prices have since corrected in the past two weeks but remain up more than 50% year-to-date. Analysts say many of the drivers that pushed bullion higher remain intact, although China’s decision is expected to cool speculative and consumer demand in one of the world’s largest jewellery markets.

Market participants in the UAE said the move bears watching, although demand locally has continued to track festival-season buying cycles and long-term investment themes rather than short-term volatility. Many jewellers still expect central bank demand and global macro uncertainty to underpin pricing.

Traders added that price-sensitive buyers may continue favouring smaller, lighter pieces while long-term savers take advantage of pullbacks. The premium on physical gold in key Asian markets will also be monitored, given China’s role in setting price floors this year through sustained demand.