Gold glitters at record highs, but Diwali buyers in Dubai turn strategic

17/10/2025 02:39 AST

As Diwali festivities light up Dubai, gold prices have reached dazzling new heights, prompting a shift in how Indian expatriates approach their traditional purchases. The yellow metal surged past $4,250 per ounce globally, with Dubai's local rate for 24K gold hitting Dh509.25 per gram and 22K gold at Dh471.50 per gram. This marks a more than 50% increase year-on-year, making this Diwali season one of the most expensive in recent memory for gold buyers.

Yet, tradition remains resilient. For millions of Indian residents in the UAE, buying gold during Diwali is more than a financial decision-it's a cultural imperative believed to usher prosperity into the home. But with prices at historic highs, buyers are adapting.

"People are being smarter about it," said Farhan Badami, Business Development Manager at eToro. "Instead of splurging on heavy jewellery, many are opting for smaller coins, lighter pieces, or spreading purchases across the year."

This strategic shift is evident across Dubai's famed Gold Souq, where jewellers report brisk business despite the price surge. The psychology of buying has evolved: consumers are leveraging rupee-linked accounts to benefit from currency arbitrage, and some are even timing purchases to coincide with promotional offers during the Diwali shopping season.

Retailers are responding with creativity. The Diwali 2025 celebrations, running from October 17 to 26, feature shopping vouchers worth Dh150,000 and discounts designed to maintain momentum. Jewellers who stocked up when prices were lower are now enjoying healthy margins, while customers are navigating the market with a mix of devotion and financial prudence.

Globally, gold's rally is driven by a confluence of factors: expectations of interest rate cuts by the US Federal Reserve, escalating geopolitical tensions, and continued central bank buying. Analysts say the metal's safe-haven appeal has intensified amid concerns over debt levels and a weakening dollar.

Dubai's role as a global gold hub is once again in the spotlight. With VAT advantages, high purity standards, and competitive pricing, the emirate remains a preferred destination for gold shopping-especially during Diwali. What happens here often signals broader trends in the global gold market.

This year, the signal is clear: demand remains resilient, but buyers are more strategic than ever. The economic pressures haven't dampened the spirit of Diwali-they've simply reshaped how tradition is honored.

As Badami puts it, "The auspiciousness of the occasion doesn't require maxing out your budget. It's the intention that matters."

Khaleej Times