UAE shoppers are increasingly buying gold bars, following Trump's action
In the bustling city of Dubai, gold bars have become a preferred choice among consumers and investors, surpassing the demand for traditional jewelry. This shift, driven by economic uncertainty and rising gold prices, has seen a 25% increase in the purchase of gold bars and coins in Q2 2025, while demand for gold jewelry declined by 16% in the same period.
The allure of gold bars lies in their status as a safer investment and a more liquid asset, particularly in times of economic turmoil. The lack of Value Added Tax (VAT) on gold in the UAE significantly benefits investors, lowering the overall cost compared to markets where VAT applies to gold purchases. This tax advantage enhances the attractiveness of gold bars as an inflation hedge and a store of value.
Economic uncertainty and inflation fears have driven investors to buy gold bars as a safe haven to protect their wealth against inflation and currency fluctuations. Wealthier individuals, including those using digital platforms to buy gold fractionally, show a stronger demand for gold bars. Meanwhile, jewelry sales decline sharply due to the high gold price, with consumers either delaying purchases or opting for lighter, gemstone-heavy, or alternative styles.
The recent tariffs and soaring gold prices, pushing prices to historic highs, have reinforced gold’s appeal as a hedge and limited affordability for jewelry and smaller coins. As a result, gold bars have become increasingly popular for serious investments.
Interestingly, the latest interest in gold bars may be due to the US President's new tariffs targeting 1-kilo gold bars from Switzerland. This development has given the interest in gold bars among UAE shoppers another push.
Gold bars offer several advantages over jewelry. They are not subject to VAT, making them a more cost-effective investment compared to jewelry, which often carries additional making charges and taxes. Moreover, gold bars can be easily sold on in other countries and do not lose value on making charges when sold at a later date.
The popularity of gold bars among UAE shoppers has been growing in the past few months. The Dubai gold rate sped to Dh379 due to the price surge last Friday, with a 22K gram of gold priced at Dh379, close to the highest ever recorded price of Dh383.75. Gold bars are trending in Dubai's jewellery retailers, and their ease of transport makes them an attractive option for expats who can carry them back to their home countries without issues from customs authorities.
In conclusion, the VAT exemption on gold, coupled with gold bars’ reputation as a reliable inflation hedge and liquid safe investment, drives the growing preference for bullion over jewelry among UAE consumers despite record high gold prices. This trend is likely to continue as investors seek secure investments in uncertain economic times.
[1] World Gold Council, Q2 2025 Gold Demand Trends Report [2] World Gold Council, Digital Gold Report 2025 [3] Bloomberg, Gold Prices Soar to Near $3,400 an Ounce Levels [4] Khaleej Times, Gold Bars Gaining Popularity Over Jewelry in UAE [5] Gulf News, Gold Bars: A Safe Haven for UAE Investors in Times of Economic Uncertainty
- In the realm of finance and investments, the growing preference for gold bars over jewelry in the UAE is driven by their status as a tax-exempt, liquid asset, and a reliable inflation hedge, making them an attractive safe haven for investors during economic uncertainty.
- Amid concerns about economic instability and inflation, both news reports and research from the World Gold Council have highlighted the increasing popularity of gold bars among wealthier individuals in the UAE, due in part to their lower cost, ease of transportation, and potential for higher returns, leading to a decline in demand for traditional gold jewelry.
