The United Arab Emirates (UAE) has the second-highest consumer demand for gold jewelry per capita in the world, trailing only behind Hong Kong. Despite a decrease in consumption levels in the first two quarters of 2024, the UAE remains the fifth-largest market for gold jewelry demand globally. Factors contributing to this high demand include the country’s high GDP per capita, the cultural significance of gold, tax-free shopping, a strong tourism sector, a robust retail industry, and gold’s reputation as a secure investment.
Annually, the UAE sees a demand for nearly 40 tonnes of gold jewelry, putting it on par with Russia in terms of consumption. This demand has seen a decline from 10.3 tonnes in the fourth quarter of 2023 to 9.2 tonnes in the second quarter of 2024. The decrease in jewelry demand is primarily attributed to the high global gold prices that are reflected in the local market. The UAE faced a 13% decline in gold jewelry demand year-on-year during the April-June 2024 period.
The World Gold Council reports that the UAE has an estimated market cap of $15.8 trillion, with gold seeing an almost 20% increase in value compared to the previous year. Other countries with high per capita consumer demands for gold include Switzerland, Kuwait, Turkey, Singapore, Saudi Arabia, Australia, Iran, and the United States. In terms of gold reserves, the United States leads with 8,133 tonnes of gold equating to $507 billion in monetary value.
India has shown the most increased interest in gold reserves, as indicated by 29,300 Google searches for the term ‘gold reserves’ as of February 2024. China has the highest demand for gold jewelry globally, leading with 630 tonnes in 2023, representing a 10% year-on-year increase. India follows closely with 562 tonnes of gold jewelry demand in the same year. India also ranks among the top ten nations with the highest gold reserves, holding approximately 804 tonnes worth $50 billion.
In conclusion, the UAE maintains a strong demand for gold jewelry despite a decline in consumption levels in 2024. The country’s favorable economic conditions, cultural affinity for gold, and status as a prime shopping and tourism destination contribute to its robust gold market. As global gold prices fluctuate, the UAE continues to adapt to changing consumer preferences and market dynamics. With the UAE’s significant role in the global gold industry, the country is poised to remain a key player in the market for years to come.
