Gold is cheaper in Dubai than anywhere else: Here's why

Customers at the Gold Souq in Deira, Dubai, in awe of the yellow metal trade in the city. Many customers find that Dubai gold prices are about 15% cheaper than other countries, including India.

In Dubai there is no import duty tax on raw materials like gold bars and TT bars. Shamlal Ahmad, Managing Partner of Malabar Gold, explained that because of this, traders are able to bring in the precious yellow metal from anywhere in the world, tax free.

Tourists visiting the Gold Souq in Deira, Dubai. The insurance cost for holding gold stock in Dubai is cheaper than the rest of the world. With the import duty on raw materials being nil and on gold jewellery minimal, gold traders are able to import from anywhere in the world, and pass the savings on to the customers.

Shoppers at Deira Gold Souq. Why is gold cheaper in Dubai? Karim Merchant, Group CEO and Managing Director of Pure Gold Group, explains: "We are ahead of the game because of the import duty. The other factor why people flock to Dubai to buy gold is because they trust the gold purchased here, whether it is for the quality or the purity."

Quality is carefully taken care of in this market. Tawhid Abdulla, Chairman of Dubai Gold and Jewellery Group, explains: “The retail price is calculated based on the ounce rate for gold in the international markets and published in local currency to ensure uniformity and transparency,” he said.

A customer browses for jewellery at the Gold Souq IN Dubai. The purpose of regular and random inspections: To ensure all pieces of gold bars and jewellery sold in Dubai are stamped with the correct fineness mark, indicating purity of gold content and ensure that there is quality products of gold sold in the market, said officials.

Ismail Abdulla Almass, head of product quality control unit at Dubai Central Laboratory, said there are 804 jewellery stores registered in Dubai.

Meet Maryam Mohammad Al Hammadi, the first woman gold inspector of Dubai checks the calibration of a gold weighing machine as part of the inspection process. For the uninitiated, Dubai Municipality conducts random inspections of jewellery shops in the Emirate to ensure quality standards of gold and jewellery is maintained. You know now why Dubai gold can be trusted.

The Dubai Municipality (DM) has nine inspectors employed by DCL, four of whom are dedicated for gold and precious metals. Gold inspectors seen walking inside the Karama Centre to do a random inspections as part of their routine.

Gold sold in Dubai: The pieces carry various fineness mark, according to the caratage of gold. For example, 22 carat carries a mark of 916, 21 carat – 875, 18 carat – 750, 16 carat – 666, 14 carat – 583, 12 carat – 500. Silver and platinum jewellery pieces carry fineness marks as well

Tawhid Abdulla, Chairman – Dubai Gold and Jewellery Group, said: “Fluctuations in gold rates do not affect the making charge of jewelley in Dubai."

Some of leading jewellery retail chains in the UAE include the likes of Joyalukkas, Malabar Gold and Diamonds, Pure Gold Jewellers.

Ranjith Thavittchura Kunnummal, Precious Metal Analyst (Chemist) at the Dubai Central Laboratory airbrushing a jewellery piece at the testing department

Inside the furnace room, extracting gold from the jewellery piece being inspected. First, the sample is measured for its weight. It is air brushed to remove any impurities that maybe sticking to the gold piece. A precious metal analyst then cuts a little piece of the jewellery, which is put into the special X-Ray machine once again to get the purity details.