As gold prices soar to unprecedented levels, consumers in the UAE are opting for more budget-friendly alternatives, leading to a significant rise in the popularity of 18K gold jewellery and diamond pieces.
In Dubai, the price of gold reached an all-time high on October 23, with 24K gold hitting Dh333.0 per gram and 22K gold climbing to Dh308.25 per gram. As of Monday evening, these prices remained elevated, with 24K at Dh331.75, 22K at Dh307.25, and 21K at Dh297.5. Consequently, the demand for 18K gold, priced at Dh255.0 per gram, is on the rise as consumers seek more affordable options without sacrificing quality.
Changing Consumer Preferences
Industry executives report a notable shift in consumer preferences as shoppers move away from the traditionally favored 22K gold jewellery, which is particularly popular among Asian buyers due to its purity. With the upcoming Indian festivals of Diwali and Dhanteras, the Dubai Gold Souk is bustling with buyers looking for gold and jewellery as retailers offer various promotions.
Anuraag Sinha, managing director of Liali Jewellery, noted that the rising demand for 18K jewellery is attributed to its affordability, durability, and design versatility. “As gold prices surge, 18K jewellery has become more appealing due to its balance of style and affordability, meeting customer needs in a high-gold-price market,” Sinha explained.
Chirag Vora, managing director of Bafleh Jewellery, highlighted that while there is a price difference of around 15 to 18 percent between 18K and 22K gold, the making charges for 18K jewellery tend to be higher. However, the lightweight nature of some 18K collections is attracting customers seeking cost-effective options.
The Rise of Diamond Jewellery
Alongside the shift towards 18K gold, there is a clear trend of UAE shoppers gravitating towards diamond jewellery as a fashionable alternative. Afzal Arakkal, director of Arakkal Gold and Diamonds, stated that diamonds serve as both a significant investment and a status symbol, making them increasingly attractive in fine jewellery collections.
Vora noted an uptick in demand for diamond jewellery, particularly small sets and pieces featuring colored gemstones such as emeralds and rubies. He pointed out that for the same price as a 100-gram 22K jewellery set costing around Dh35,000, customers can purchase diamond bracelets or solitaire earrings, which offer a more appealing aesthetic.
Sinha emphasized that diamond jewellery is especially popular for gifting during special occasions and festivals, symbolizing elegance and prestige. This trend reflects changing consumer preferences as shoppers explore more economically appealing alternatives to high-priced gold pieces.
Conclusion
As the UAE grapples with record-high gold prices, the jewellery market is experiencing a transformative shift. With consumers increasingly favoring 18K gold and diamond jewellery, retailers are adapting to these evolving preferences, ensuring they meet the needs of cost-conscious shoppers while still offering exquisite options for special occasions.
