UAE gold demand declined sharply in the first quarter of 2026 as regional tensions disrupted consumer behaviour. Jewellery sales dropped to their lowest level in nearly six years, while investment demand increased.
Industry data showed jewellery demand fell by 40 percent between January and March. Consumers purchased 4.7 tonnes, compared to 7.9 tonnes in the same period last year. Rising uncertainty across the region reduced spending appetite.
A regional conflict involving the United States, Israel, and Iran intensified at the end of February. The escalation quickly affected consumer confidence across Gulf markets. Jewellery retailers in the UAE reported weaker activity throughout March.
Tourism also slowed during the quarter. Fewer international visitors arrived in Dubai, which reduced spending on jewellery and luxury goods. Travel uncertainty further limited demand from foreign buyers.
In contrast, investment demand increased strongly. Purchases of gold bars and coins rose by 27 percent, reaching 4.0 tonnes compared to 3.1 tonnes last year. Many residents shifted toward bullion as prices remained elevated.
Gold prices stayed high during the quarter. 24K gold in Dubai closed at Dh568.25 per gram, while 22K reached Dh526.25. Globally, gold traded above $4,700 per ounce in recent sessions.
Worldwide jewellery demand also weakened, falling 23 percent year on year. High prices and geopolitical risks discouraged consumer purchases across multiple markets.
Analysts expect jewellery demand to remain under pressure in the coming months. However, investment demand may stay stable as uncertainty continues to support safe-haven buying.
Market experts also warn that further escalation in regional tensions could increase volatility in gold markets. ETF flows and retail demand remain sensitive to global risk sentiment.
Overall, UAE gold demand now shows a clear split between declining jewellery consumption and rising investment buying. Future trends will depend heavily on geopolitical developments and price stability.
