The United Arab Emirates’ gold jewelry sector is experiencing a significant transformation driven by unprecedented market pressures. Industry consolidation has become the predominant survival strategy as jewelers grapple with the dual challenges of record-breaking gold prices and escalating operational expenses.
Market leaders confirm that a wave of mergers and acquisitions is sweeping through the industry. This trend follows the landmark acquisition of Dubai-based Damas by India’s Titan Company for approximately Dh1.038 billion, a deal that has drawn international attention to the Gulf region’s precious metals market.
According to Chandu Siroya of Siroya Jewellers, the current environment has made collaboration essential. ‘Manufacturers are joining forces to distribute fixed costs more effectively,’ Siroya explained. ‘We anticipate 2026 will mark the beginning of a new era for jewelry retail in the region.’
The industry faces a perfect storm of financial pressures. Commercial rents in Dubai have surged dramatically post-pandemic, driven by high demand for premium retail locations. Simultaneously, borrowing costs have tripled from historical lows, with gold financing rates jumping from 2% to at least 6% as banks increase their margins.
A critical paradox emerges from the current market dynamics: while gold prices have soared beyond $4,000 per ounce, profit margins per gram remain unchanged. This compression means retailers earn significantly less per dollar invested than during previous market cycles.
Chirag Vora, Managing Director of Bafleh Jewellers, views the consolidation as ultimately beneficial. ‘The industry has reached an inflection point where consolidation is necessary for long-term sustainability,’ Vora noted. ‘While the short-term adjustment presents challenges, the future appears promising for a streamlined jewelry sector.’
Aditya Singh of Titan Company identified commercial real estate as a particular concern, noting that ‘mall inventory remains controlled by very few players, creating a supplier’s market that further pressures retailers.’
The industry adaptation includes changing consumer behavior, with buyers demonstrating increased understanding of manufacturing costs and showing reduced price negotiation tendencies according to market observers.