UAE gold jewellery demand drops 28% as prices and regional tensions climb

UAE gold jewellery demand fell 28 per cent year-on-year to 5.6 tonnes in the second quarter of 2026, dropping from 7.7 tonnes during the same period last year. High gold prices and regional geopolitical tensions in the Middle East drove the decline, according to the latest sector data released on Tuesday, 4 August. Rising Prices Dampen Consumer Appetite The sharp contraction in volume comes as global gold prices reached record highs during the April-to-June period. In the UAE, retail gold prices typically track international spot rates, which were pressured upward by central bank buying and safe-haven demand. This price surge deterred price-sensitive resident buyers and tourists who traditionally drive the country’s physical gold market. Regional instability contributed to a cautious consumer sentiment. The World Gold Council noted that geopolitical friction across the Middle East has historically impacted discretionary spending in the luxury and jewellery sectors, as buyers prioritise liquidity over physical assets. Market Outlook for H2 2026 While jewellery demand saw a double-digit decline, investment demand for bars and coins remained relatively stable as investors sought protection against currency fluctuations. Retailers in Dubai’s Gold Souk and major shopping malls reported a shift toward lighter, lower-carat pieces as consumers adjusted to higher per-gram costs. Industry analysts expect the market to remain under pressure through the third quarter unless…