The United Arab Emirates jewelry sector is experiencing a significant market transformation as record-breaking gold prices drive consumer preference toward diamond jewelry. With gold reaching unprecedented levels of $4,549 per ounce globally and exceeding Dh546 per gram locally in 2025, Dubai jewelers report substantial growth in both natural and lab-grown diamond demand.
Industry leaders indicate that diamond sales have increased by 25-30% year-on-year, effectively compensating for declining gold jewelry transactions. Chirag Vora, Managing Director of Bafleh Jewellers, explained that elevated gold prices have created market challenges, but diamond sales have emerged as a crucial revenue offset. “Diamond is offsetting the effect of gold sales for almost all companies,” Vora noted, emphasizing that wholesale distribution channels have particularly benefited from this trend.
The market shift extends beyond mere price considerations to evolving gifting preferences. Consumers now increasingly favor diamond-studded gifts over smaller gold ornaments, perceiving them as more impressive presents. This behavioral change spans both natural and lab-grown diamond categories, with both segments growing simultaneously rather than one replacing the other.
Chandu Siroya of Siroya Jewellers characterized 2025 as a challenging retail environment, noting that while dollar-term sales remained strong due to inflated gold prices, quantitative sales decreased by 20-30%. This has prompted industry-wide innovation, with jewelers promoting more elegant, diamond-studded pieces rather than traditional heavy gold jewelry.
Market adaptation includes the introduction of 14-carat gold jewelry by the Dubai Jewellery Group, making pieces more affordable amid sustained high gold prices. Industry professionals anticipate 2026 will mark a new era for jewelry, with consumers having accepted that gold will maintain its elevated price point around $4,000 per ounce.
The lab-grown diamond segment continues gaining traction, with new varieties expected to enter the market in 2026. International brands like Tanishq are capitalizing on this trend, with Aditya Singh, Head of International Jewellery Business at Titan Company, noting increased industry focus on diamond categories through expanded design offerings and promotional activities. The convergence of high gold prices and evolving consumer preferences is driving innovation toward lighter, more wearable everyday jewelry pieces across the UAE market.