Gold keeps breaking records, but Dubai’s shoppers aren’t backing away

Dubai: Gold has reached new highs 40 times this year. Conventional wisdom would suggest buyers might step back as prices soar. Yet a visit to Dubai’s Gold Souq extension shows little sign of hesitation.

(Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Retailers say the psychology of gold buyers has barely changed. Shoppers know they are getting less value for their money as prices rise, but that does not mean they are adjusting their budgets. “Despite the surge in gold prices, for us and industry wide the real purchase power has changed for sure,” said Arjun Dhanak, Director at Kanz. “For example, if people used to buy jewellery for Dh10,000 last year, they are also spending Dh10,000 now, but they will be getting much lesser weight compared to last year.”

That willingness to keep buying, even when the price feels steep, is rooted in gold’s reputation as a safe haven. Retailers say customers fear missing out if the metal price rises further. “Since gold touched its all-time high several times this year, people expect it to go up and that fear is also why they continue to purchase jewellery,” one retailer explained.

It’s not just the retail market holding firm. Digital gold, once a niche play,  has become an important part of the demand story. “Post Covid-19, investments in gold in digital form has gained momentum,” said Viraj Shah, General Manager at Bafleh Jewellery. He noted that festival-driven buying still shapes demand, but online investment platforms are adding another layer of interest. “Gold investment is very price sensitive and demand sensitive around festivities. Given that there is festive season around, the demand remains strong,” he said. From an investment angle, though, some buyers are pausing as prices move “too fast too soon.”

The rally is tempting some to lock in profits. “People who bought gold at lower prices are cashing in to get their returns,” Shah said. But the safe-haven mindset keeps a floor under demand. “An investor will always cash-in when he is comfortable and thinks he has made a good, but someone who looks at gold from a safe haven status might hold onto it.”

Higher prices may shrink the grams a buyer walks away with, but they have not dented the desire to own gold, in stores or online. With the festive season driving purchases and digital channels opening new doors, the city’s gold market remains resilient, even at record highs.