GOLD VALUE IN DUBAI: WHAT INFLUENCES GOLD PRICES

GOLD VALUE IN DUBAI | 4 DECEMBER 2024

Similar to any other market, Dubai’s gold value faces a number of challenges brought on by both domestic and foreign causes. When buying gold, investors can make an informed choice by navigating these considerations.

Global Gold Prices

In contrast to supply and demand in international markets, international gold prices heavily influence Dubai’s gold prices. In order to provide a benchmark for gold rates in Dubai, the London Bullion Market Association (LBMA) sets the price twice a day.

Local Gold Demand

The Dubai gold market is influenced by both domestic and foreign demand. With a large influx of tourists, particularly from China and India, Dubai’s desire for gold jewellery rises. While prices are either stable or marginally lower during periods of lesser demand, rising demand drives prices higher.

Currency Exchange Rates

Another factor affecting gold prices in Dubai is the US dollar’s peg to the UAE’s Dirham (AED). Gold prices in the United Arab Emirates will be directly impacted by any changes in the value of the US dollar. As a result, when the US dollar gains strength, gold prices decline and vice versa.

Political and Economic Stability

Generally seen as a safe-haven asset, gold prices rise in response to political or economic unrest. Global economic issues like rising interest rates, inflation, and geopolitical tensions had a major role in 2024’s spike in gold prices everywhere, including Dubai. Due to a number of circumstances, Dubai has been able to maintain its status as the “City of Gold” and the “Jewellery Destination of the World.” Dubai is a hotspot for gold trade since it is the preferred destination for foreigners, tourists, and investors to buy and invest in gold.

No Taxes on Gold

One of the primary factors contributing to Dubai’s reputation as a gold investment hub is its tax-free policy. Due to the authorities’ exemption of gold transactions from VAT, buyers and investors from all over the world have been drawn to the market. This strategy sets stable and reasonable rates for investors and consumers, which is unique compared to many other countries. Keep in mind that the only precious metals and gold that are VAT-exempt are the purest varieties.

BlogGOLD VALUE IN DUBAI: KEY FACTORS THAT INFLUENCE GOLD PRICES IN DUBAI