UAE gold: Will 0% making charges, 18K collections revive jewellery sales?

Dubai: With Dubai gold rates back to near Dh380 a gram, is it time for UAE shoppers to be thinking different?

According to sources in the trade, there could be two trends that will re-define how gold and jewellery is sold in the UAE if the current price levels sustain.

The discussions among UAE jewellers is getting more intense – should they start using special promotions with zero making charges more regularly?

Currently, only a handful of major UAE gold jewellers have brought out such promotions, including as recently as last weekend when prices were inching higher after dropping to Dh365 earlier. The current price of gold in the UAE is Dh377.5 a gram for 22K.)

UAE jewelers use zero making offers only on older collections as of now, while on newer jewellery the typical discounts during promotions tend to be in the 10%-20% range.

“0% making charge promotions should be used rarely – otherwise shoppers will stop coming for anything else,” said a jeweler. “We have seen that some among the Top 5 gold retailers have launched such promotions. In our view, these should not be done more than once or twice a year.”

But there is fatigue among UAE’s gold shoppers when prices are consistently in the Dh370 and over range. These shoppers are going back to the stores only when prices drop to Dh360-Dh365 levels based on trends seen this year, when gold hit new price highs consistently.

Also, industry sources say that it’s getting even more difficult to convince shoppers that even if they are buying at, say, Dh370 it’s a still a ‘bargain’ because prices could go up to Dh400 plus – and stay that way.

UAE’s jewellery sales have dropped by quite a margin in the first six months of 2025 purely because of the high prices. Further drops and retailers will find it difficult to sustain their store networks and staff size, sources add.

So, the need of these times is for ‘different types of promotions’. Will zero making charges be one of them?

Lighter gold jewellery means more ‘affordable’ pricing. This is also the message that jewelers are putting out.

The 18K collections are already popular with younger shoppers and finding higher interest among older buyers too these days. The formula is simple – lighter than 22K, which is the most popular shopper choice, the 18K thus gives buyers more for the same price they are willing to pay.   

“18K gold jewellery allows for more complex designs, precision stone-setting, and a more global design language,” said a spokesperson for Tanishq.

“While the making charges may be slightly higher per gram, the resale on 18K purchased at Tanishq gets not only the valuation on (that day’s) gold rate but also the value of the diamond (in the jewellery),” the spokesperson added. “The usual practice is based on net gold value and does not typically include the (diamond) stone’s value.”

Will 18K thus provide UAE gold retailers with the sales boost that 22K jewellery is not giving them these days?

Some jewelers say this will be difficult, because of the sheer dominance 22K has on the shoppers’ psyche. “18K jewellery will remain a niche and it will take another 3-5 before it builds up sufficient scale in the UAE,” said a retailer. “The young and Western shoppers are the major buyers for 18 now – but there needs to be a bigger base for jewelers to invest in 18K collections and their promotions.”