Are UAE gold prices 'lowest in the world'?

Dubai: Even as gold prices push into never-before-seen $2,800 plus levels, UAE jewellers are focusing only on one message: ‘Gold prices in the UAE are the lowest anywhere in the world’.

They need to do so as gold keeps edging higher, and with more analysts suggesting that $3,000 an ounce is a real possibility this year itself. Such a price level is not so far-fetched – just over the last 12 months, gold’s gone up by over $700 on an ounce basis.

This is why jewellery retailers in the UAE are repeating the message of buying gold here still comes with a definite price advantage compared to other markets.

“On January 29, when the UAE gold rate for a gram of 22K was Dh309.25, the India rate was Dh323 (factoring in import duties, currency exchange, etc.),” said Shamlal Ahmed, Managing Director of International Operations at Malabar Gold & Diamond.

“A similar 22K gram in Malaysia would have been Dh322 and in the UK, Dh326.

“Now, even if one compares gold retail prices within the GCC, Qatar’s would be Dh315.”

According to jewellery industry sources, only Kuwait has a price lower than in the UAE when it comes to gold, while in Saudi Arabia, it’s at the same level. But making charges for jewellery in Kuwait are higher, while shoppers in Saudi Arabia also must factor in the 15% VAT compared to 5% in the UAE.

The next few weeks are crucial for the gold retail trade in the UAE with a heavy tourist and visitor presence expected, with big-ticket conferences and exhibitions kicking off. In recent months, tourist shopping for gold had been a key component to keep overall sales steady through a difficult period.

Jewellery retailers have also been giving extra attention to their making charges, running more campaigns that offer bare minimum expenses for shoppers. Last weekend, one of the big jewellery retailers confirmed sizeable shopper presence and buying after they brought in a limited-time promotion where making charges were the focus.

“You had the gold price at Dh314 a gram – it didn’t seem to matter to shoppers,” said the retailer. “They were ready to take the savings we were offering on making charges.”

Jewellery retailers are even getting into uncharted waters - of strictly limited time offers of 0% making charges. Joyalukkas ran with that promotion, but limiting it to just one outlet, its store at Silicon Central Mall in Dubai.

There is this sentiment among shoppers that if they have to buy gold or a piece of jewellery, they would rather do that then and there rather than sit around until prices turn favourable.

Because the last 12 months have proved one thing - gold prices are in no mood to take a major retreat.

2024 saw multiple first-time price highs being breached. If anyone thought that price gains would slow down at $2,300 or $2,400, they were proved wrong. The same when it hit $2,600 or $2,700.

Now, not many expect price gains to slow down from reaching $2,900 and beyond.

So, if UAE continues to have the lowest gold price - inclusive of making charges - then there will always be takers.