DUBAI GOLD RATE UNCHANGED AS GOLD LOANS TURN POPULAR WITH UAE CONSUMERS

Dubai: For a fourth consecutive day, the Dubai gold rate has more or less remained unchanged at just over Dh369 a gram for 22K – a trend that’s been rare over the last 6 months. Typically, local gold prices have seen changes by Dh2-Dh4 on a near daily basis during this period, and on occasions even gone up or down by Dh8-Dh10 a gram.

After the slight spike in gold demand over the last weekend, which had to do with Eid purchases, shopper turnout has been subdued. The next big gold and jewellery promotions will start soon enough with Dubai Summer Surprises.

Can Dubai gold price drop back to Dh360 levels - even go lower?

“Other than price drops, what gold shoppers most value is seeing price stability,” said a jewellery retailer. “They have got that these few days, but shoppers will need to see prices drop even below Dh369 to decide if they are ready to buy more.”

But those UAE shoppers who already own gold are turning to other ways to make full use of high prices for their asset.

Going for 'gold loans'

Gold-backed loans are proving popular this summer among those UAE residents who need immediate funds but prefer not to take out loans from banks. It used to be that small business owners typically use their gold to borrow on a short-term basis, but there are now individuals with immediate cash needs willing to put up their gold.  

“Borrowers can access up to 85% of their gold's market value, providing substantial funds,” said Bandar Al Othman, Chairman of O Gold. “Combined with competitive interest rates of 9%–11% - which are significantly lower than unsecured loan options – gold loans offer a financially sound alternative.

“This, coupled with gold’s inherent stability in the current economic climate, ensures a robust market and positions gold loans as a reliable and increasingly popular financial tool.”

Other industry sources confirm there is a 'mini-trend' among UAE residents for gold-backed loans. "It's still a small base of individuals who are doing it, but what the UAE gold market is seeing are changes to how consumers want to to make best use of gold.

"They are shifting from just buy at every price drop mentality to what they can do to make best use of the gold they already have.

"For strictly short-term funding needs, gold loans are quite useful."

2025-06-10T03:30:35Z