UAE gold jewellery demand falls to nearly six-year low amid regional war
Gold jewellery demand in the UAE fell 40 per cent in the first quarter of 2026, hitting a nearly six-year low due to the regional military conflict.
According to data from the World Gold Council, jewellery demand declined to 4.7 tonnes during the January-March 2026 period, compared to 7.9 tonnes in the same period last year. The outbreak of war involving the US, Israel and Iran on February 28 led to a sharp drop in sales during March 2026.
The data showed that gold jewellery demand had previously dropped to 3.8 tonnes in the second quarter of 2020, when the Covid-19 pandemic severely impacted sales due to travel restrictions imposed within and outside the UAE.
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The decline in tourist arrivals to the UAE amid the regional conflict also weighed on jewellery sales, as foreign visitors account for a significant share of gold and precious metal purchases in the country, particularly in Dubai.
However, demand for gold coins and bars increased sharply, rising 27 per cent year-on-year in the first quarter of 2026 to 4.0 tonnes, compared to 3.1 tonnes during the same period last year.
Residents have increasingly shifted away from jewellery purchases and towards coins and bars as investment assets, anticipating further gains in precious metal prices.
On Sunday, gold prices closed at $4,715.6 per ounce, up 0.34 per cent. In Dubai, 24K and 22K gold prices closed at Dh568.25 and Dh526.25 per gram, respectively.
Globally, jewellery demand volumes also remained under pressure, declining 23 per cent year-on-year.
The World Gold Council expects global jewellery demand to stay subdued for similar reasons, although overall spending is likely to remain resilient.
Gold under pressure
Gold prices peaked earlier this year but have been trending downward since the US-Israel-Iran war amid concerns over higher inflation in the US.
Analysts said gold prices could face renewed bearish pressure due to the risk of further escalation in the Middle East.
“Gold remains vulnerable to a sharp reversal amid prevailing risk factors that could fuel a downward trend, particularly given the lack of any near-term prospect for a comprehensive settlement to the Middle East conflict. This is causing liquidity flowing into the precious metal to dry up, from both physical exchange-traded funds and demand for gold jewellery worldwide,” said Simon-Peter Massabni, head of business development at xs.com.
“Despite US President Donald Trump’s announcement to halt Project Freedom, which aimed to forcibly reopen the Strait of Hormuz, the conditions for renewed escalation still remain,” he added.
