UAE Diamond Demand Hits Record Levels as Gold Prices Soar in 2025
In 2025, the UAE jewellery market is undergoing a noticeable shift. As gold prices continue to climb to historic highs, consumers across Dubai and other emirates are increasingly choosing diamond jewellery instead. This change is not driven by fashion alone but by a combination of affordability concerns, evolving buyer preferences, and long term value considerations.
Gold prices have surged globally, pushing local rates in the UAE to levels many shoppers have never seen before. With gold trading at record prices per ounce internationally and exceeding Dh540 per gram in Dubai, buying traditional gold jewellery has become significantly more expensive. As a result, many residents and tourists are reassessing how and where they spend their money when it comes to jewellery.
This has opened the door for diamonds to take center stage.
Why are UAE shoppers choosing diamonds over gold?
The biggest question people are asking is simple. Why are diamonds suddenly in such high demand in the UAE?
The answer lies in price sensitivity and perceived value. When gold prices rise sharply, buyers often reduce the quantity of gold they purchase or delay buying altogether. Diamonds, on the other hand, offer flexibility. Shoppers can choose smaller carat sizes, lighter designs, or lab grown alternatives while still owning a piece of jewellery that feels luxurious and meaningful.
Jewellery retailers across Dubai report that diamond sales have increased by as much as 25 to 30 percent year on year. Many customers who previously preferred gold for weddings, gifts, or investments are now opting for diamond rings, necklaces, and earrings instead.
Another key reason is emotional value. Diamonds are often associated with milestones such as engagements, anniversaries, and personal achievements. Even during times of high gold prices, consumers still want jewellery that represents lasting value, and diamonds fulfil that role.
The rise of lab grown diamonds in the UAE
One of the most important developments driving this trend is the growing acceptance of lab grown diamonds. In the past, some buyers were hesitant, viewing them as inferior to natural diamonds. That perception has changed dramatically.
Today, lab grown diamonds are chemically and visually identical to natural ones. They are also more affordable, which makes them attractive to younger buyers and first time jewellery shoppers. Many consumers also see lab grown diamonds as a more ethical and environmentally conscious option.
Retailers in the UAE confirm that both natural and lab grown diamonds are selling well, often to different customer segments. High net worth buyers continue to prefer natural diamonds for exclusivity and heritage, while budget conscious buyers and younger consumers lean toward lab grown stones for value and accessibility.
This dual demand is helping the diamond market grow faster than ever before.
How high gold prices are reshaping jewellery buying habits
Gold remains deeply rooted in Middle Eastern culture, especially for weddings and family gifting. However, when prices rise too quickly, behaviour changes.
Instead of buying heavy gold sets, shoppers are now choosing lighter jewellery pieces. Many are shifting to 14 carat gold instead of 22 carat, or combining smaller amounts of gold with diamonds to keep costs manageable.
Some consumers are also buying gold purely as an investment and choosing diamonds for wearable jewellery. This separation between investment gold and lifestyle jewellery is becoming more common in the UAE market.
Retailers have adapted quickly by introducing lighter designs, flexible pricing, and diamond focused collections that appeal to modern tastes.
Is diamond jewellery a good investment for 2026?
Another question people frequently ask is whether diamonds are a smart investment compared to gold.
The truth is that diamonds and gold serve different purposes. Gold is highly liquid and its price is transparent and standardized globally. Diamonds do not work the same way. Their value depends on factors such as cut, clarity, color, carat weight, and brand reputation.
However, diamonds hold strong long term value when purchased wisely. High quality stones from reputable jewellers tend to retain worth over time, especially when demand is strong as it is now in the UAE.
Lab grown diamonds are generally not considered investment assets, but they offer excellent value for personal use. Natural diamonds, particularly certified stones, can be a store of value and are often passed down through generations.
For many buyers, the goal is not short term resale but emotional value, durability, and lifestyle appeal. In that sense, diamonds are proving to be a smart alternative during periods of extreme gold price volatility.
Dubai’s role as a global diamond hub
Dubai’s position as a global jewellery and diamond trading hub has also contributed to rising demand. The city offers competitive pricing, a wide selection of international brands, and strong consumer trust.
Tourists visiting the UAE often see diamonds as a safer purchase than gold when prices are high. Many prefer to buy diamond jewellery that is easy to transport, less dependent on weight, and universally appealing.
With continued growth in tourism and retail innovation, Dubai’s diamond market is expected to expand even further into 2026.
What to expect next in the UAE jewellery market
Looking ahead, experts believe that diamond demand will remain strong as long as gold prices stay elevated. Even if gold prices stabilize, the habits formed during this period are likely to continue.
More buyers are becoming comfortable with diamond jewellery for everyday wear rather than just special occasions. Custom designs, minimal styles, and lab grown collections are expected to dominate future trends.
Jewellery brands are also investing more in education, helping customers understand diamond quality and make informed purchasing decisions. This transparency builds trust and encourages repeat buying.
The shift taking place in 2025 to 2026 is not temporary. It represents a long term evolution in how people in the UAE view jewellery, value, and personal expression.
Final thoughts
The surge in diamond demand in the UAE is a direct response to record high gold prices, but it is also driven by deeper changes in consumer mindset. Buyers want flexibility, emotional value, and affordability without sacrificing luxury.
Diamonds, both natural and lab grown, are meeting those needs perfectly.
As gold continues to test new highs, diamonds are no longer just an alternative. They are becoming a first choice for many UAE shoppers in 2025 and beyond.
Source: KhaleejTimes
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