UAE shoppers switch to cheaper 18K gold jewellery amid record-high prices

There is also a shift from gold to diamond jewellery as the yellow metal's prices rise

Waheed Abbas

Published: Tue 29 Oct 2024, 6:00 AM

Last updated: Wed 30 Oct 2024, 11:58 AM

Gold jewellery shoppers in Dubai and UAE are switching from the costly 22K ornaments to a more affordable 18K variant of jewellery as precious metal prices reach an all-time high.

Industry executives say the demand and appeal for diamond-studded jewellery is also increasing due to high yellow metal prices.

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In Dubai, gold prices rose to an all-time high on October 23 as the 24K variant touched Dh333 per gram while 22K soared to Dh308.25 per gram. Other variants, 21K and 18K, also hit an all-time high of Dh298.5 and Dh255.75 per gram, respectively.

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On Monday evening, 24K, 22K, 21K and 18K were selling at Dh331.75, Dh307.25, Dh297.5 and Dh255 per gram, respectively.

Gold jewellery made of 22K is the most popular and expensive form in Dubai — especially among Asian shoppers — due to its purity.

The record-high gold prices are reshaping consumer preferences and trends in Dubai and the UAE. As reported earlier by Khaleej Times, shoppers are also preferring smaller pieces of jewellery due to their affordability. Manufacturers are also making more budget-friendly pieces.

With the Indian festivals of Diwali and Dhanteras coming up this week, the Dubai Gold Souk is witnessing a surge of gold and jewellery buyers flocking to cash in on offers and discounts offered by 300 retailers.

“The Dubai Gold Souk's extension sees a rising surge of local and international customers ahead of high-demand occasions like Diwali and Dhanteras. These festive moments play a crucial role in solidifying Dubai Gold Souk’s leadership in the global gold trading arena, firmly cementing its status as the ultimate year-round destination for gold and fine jewellery,” said Rashid Al Harmoodi, senior director for property management, Ithra Dubai.

Rising demand for 18K

Anuraag Sinha, managing director of Liali Jewellery, said that as gold prices surge, there has indeed been an increase in demand for 18K jewellery, which is more affordable than 22K or 24K options.

“They have become more appealing during high gold prices due to affordability, durability, design versatility, and investment in style, over purity. As a result, retailers have seen a shift in demand toward 18K as it balances both style and affordability, meeting customer needs in a high-gold-price market,” he said.

Chirag Vora, managing director of Bafleh Jewellery, said that there is around 15 to 18 per cent difference in the gold price of 18K and 22K.

“However, the making charges of 18K are quite higher compared to 22K. So basically, it doesn't make much difference in the pricing of the jewellery. However, there are some collections in 18K which are extremely lightweight compared to 22K and hence some customers are opting for that lightweight jewellery,” said Vora.

Echoing his industry peers, Afzal Arakkal, director of Arakkal Gold and Diamonds, said demand for 18K jewellery is increasing due to its appealing combination of affordability, significant gold content (75 per cent), and luxurious appearance.

“Overall, 18K gold has become a cost-effective alternative for those seeking quality and durability in their jewellery, especially during times of rising gold prices.”

Demand for diamonds

Arakkal said there is a clear trend among UAE shoppers moving from gold to diamond jewellery, especially as gold prices rise.

“Diamonds represent a significant investment and offer a variety of styles, often serving as a status symbol. As consumers seek alternatives to high-priced gold pieces, diamonds are becoming more attractive, particularly in fine jewellery collections. This shift reflects changing consumer preferences and market dynamics,” he said.

Chirag Vora of Bafleh Jewellery said: “There is a growing demand for diamond jewellery in small sets, pendant sets. There is also a demand for jewellery with colour or gemstones such as emerald, ruby and other coloured gemstones. This is not just because of the price but also because of the designs.”

He said that for instance, if a customer wants to buy any 22K jewellery set which is around 100 grams, it will cost approximately Dh35,000 but he/she can get a diamond bracelet or a pair of solitaire earrings for the same price; therefore, customers are finding it more interesting.

Anuraag Sinha of Liali Jewellery said: “Diamond jewellery is popular for gifting as it symbolises elegance and prestige, which has driven its appeal during special occasions and festivals like Diwali, despite the rise in gold prices. Overall, while gold jewellery remains significant, the spike in prices has encouraged some UAE shoppers to explore diamond jewellery as a fashionable and economically appealing alternative.”

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