The 24-karat gold jewels in the Gold Souk are a testament to the rich cultural heritage of Dubai. The City of Gold has been a popular destination for gold buyers for decades, with its unique blend of traditional and modern shopping experience. •
• A visit to the Gold Souk is a sensory experience that combines sights, sounds, and smells of the bustling market. • The narrow, winding alleys of the Gold Souk are filled with shops selling a wide range of gold jewellery, from intricate designs to simple yet elegant pieces. • Visitors can find everything from gold coins, bars, and sovereigns to 22-karat gold jewellery, including wedding sets, ornaments, and family heirlooms.
However, with bullion prices hitting record highs above $3,400 an ounce, the market is experiencing a shift, as buyers look to diamonds and lighter gold jewellery, instead. •
The impact on gold jewellery demand
According to Andrew Naylor, head of Middle East and Public Policy at the World Gold Council (WGC), the high prices are having a two-fold effect on the gold jewellery market:
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Lab-grown diamonds
Dubai has been a magnet for gold buyers for at least 80 years, but lab-grown diamonds are gaining popularity as an alternative to gold jewellery. •
Lab-grown diamonds are created using advanced technology, replicating the natural processes that occur deep within the Earth’s crust. They offer a more affordable and sustainable option for consumers.
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India, the world’s largest diamond exporter, has seen a significant increase in exports of lab-grown diamonds to the UAE. In 2024, India exported $171 million worth of lab-grown diamonds to the UAE, a rise of almost 57% from the previous year.
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Indian influence on the market
Indian traders have played a significant role in shaping the Dubai gold market for decades. However, the recent rise in gold prices has had a significant impact on the demand for gold jewellery. •
- Demand for gold jewellery in the UAE fell by around 13% last year, outpacing the global decline of 11%.
- The WGC has warned that jewellery demand could face further pressure across key regions in 2025 if gold prices remain elevated or volatile.
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Shifts in purchasing patterns
Trade tensions between the US and India have accelerated talk about finding alternative markets and production hubs for diamonds. •
One executive at a major Indian diamond exporter told Reuters that his company’s contingency plans included shifting some Indian production overseas, including to the UAE.
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Alternative markets
The rise of lab-grown diamonds is a clear sign of the changing times in the Dubai gold market. While gold prices are high, diamonds are becoming more affordable and appealing to consumers. •
The UAE is projected to grow by 5.9% annually to reach nearly $2 billion by 2030, making it the fastest-growing market in the Middle East and Africa.
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