Dubai – Reuters
In Dubai’s famous Gold Souk—widely known as the “City of Gold”—22-karat gold jewelry has long been the go-to choice for weddings, religious occasions, and family investments. But now, with gold bullion prices soaring past $3,400 per ounce, that long-standing trend is starting to shift.
Shoppers are turning to lighter jewelry options and diamonds—especially lab-grown ones—to cope with the rising costs. Andrew Naylor, Head of Middle East at the World Gold Council, said that although high prices are boosting gold’s role as a safe-haven asset, they’re also cutting into jewelry demand.
Retailers in Dubai’s gold market told Reuters that today’s prices are steering potential customers toward alternatives. According to the World Gold Council’s latest report, jewelry demand in the UAE fell by 13% last year—more than the global decline of 11%.
India’s lab-grown diamond exports to the UAE jumped nearly 57% over the past two years, while the UAE ranked third globally in diamond imports. The local diamond jewelry market is expected to grow by 5.9% annually, reaching nearly $2 billion by 2030.
As trade tensions with the US continue, some Indian diamond exporters are exploring options to move part of their production to the UAE—strengthening its role as a regional hub for jewelry manufacturing.