Demand for UAE gold jewellery falls by 28% in Q2 amid the Middle East conflict.

Gold jewellery consumption in the UAE declined by 28 per cent from 7.7 tonnes in Q2 2025 to 5.6 tonnes in Q2 2026, owing to the effect of regional geopolitical tensions and reduced tourist demand, as reported by the World Gold Council.

The highest price that gold attained was $5,589.38 per ounce on January 28, 2026. On that particular day, gold surged by over $300 due to the rising conflict between the US and Iran as the former threatened to launch a significant attack on the latter.

However, gold jewellery sales witnessed a 21.7% quarter-on-quarter growth in the UAE due to the highest gold price recorded in January.

However, gold bars and coins were an exception to the trend as their demand witnessed a sharp increase of 30% compared to the previous year to reach 5.3 metric tonnes from 4.1 metric tonnes in the corresponding quarter last year. Demand for gold coins and bars rose by 32.5% on a quarter-on-quarter basis in the UAE.

Gold coins and gold bars are still popular among investors in the UAE due to both cultural and economic considerations. For South Asians, Arabs and other immigrants, gold has always been associated with tradition and has been considered a symbol of wealth handed down from generation to generation, especially in marriage and festivals.

Financially speaking, gold bars and coins are considered a haven from inflation and currency risk, especially when there is geopolitical instability or the stock market is volatile. Most people tend to opt for tangible gold instead of intangible forms such as exchange-traded funds (ETFs), which provide ownership and liquidity options.

The price of precious metals has been showing downward movement since the beginning of the Middle East war due to the inflation concern created by rising oil prices.

Gold trading at the close of the day on Monday stood at $4,026 per ounce, representing a fall of 1.24%. On the other hand, the price for 24K and 22K gold in the UAE was Dh488.25 and Dh452.0 respectively.

According to Simon-Peter Massabni, CEO of business development at xs.com, ‘In terms of fundamentals, the outlook for gold will be very much driven by where inflation is going, US monetary policy, where the dollar is headed, and real interest rates.’

Massabni thinks that this outlook will continue to favour gold bullishness in the medium to long term, even though he anticipates strong corrective movements in the process.

He believes that new all-time high prices cannot be ruled out as long as the positive fundamentals continue to exist. On the contrary, the risk for investors lies in undervaluing the strength of the broader trend owing to minor pullbacks.

However, he finds no reason to chase higher prices on rallies of gold. Rather, he feels the better way forward is to wait for consolidation zones to get back into the trade.

According to Massabni, the precious metal is going through a crucial period that may determine its future.

He continued that if the present correction is just part of an overall bull run, then the present prices may come to be seen as a time of accumulation before the next big move. However, if the gold price succeeds in breaking its important resistance points, then this may signal a move from a price increase due to fear and hedging to one due to a global reevaluation of gold prices.

Because of this, he does not see gold as a story which has played out since the latest correction. Rather, he sees it as an asset which still has solid structural drivers for more upside, where proper risk management and technical validation continue to be the most important considerations when moving forward, he added.