Malabar Gold says April’s narrow UAE-India gold price gap was a temporary anomaly
Despite recent fluctuations in April, gold prices in the UAE continue to remain lower than in India, with the usual price difference of around 6% returning to the market. The brief narrowing of the gap last month — which fell to just 4% — was attributed to temporary factors in the Indian gold market and not due to any long-term currency or policy changes, according to Malabar Gold & Diamonds, reported gulfnews.com.
Gold price gap dipped below 6% in April, but was due to short-term disruptions in Indian supply and retailer margins.
Shamlal Ahmed, Managing Director of Malabar Gold & Diamonds, clarified, “Yes, there was a phase in April when the UAE-India gold price gap was 4% — but that was due to short-term issues in the Indian market. It had nothing to do with the Indian rupee or structural market changes.” He noted that the gap has now returned to its regular 6% level.
Temporary shifts in retailer premiums caused the brief price drop in India, fueling interest from UAE visitors
On April 22, for example, the Indian Board Rate for 22K gold was Rs 9,290 per gram. At the day’s exchange rate of AED 1 = INR 23.05, this translated to Dh403 per gram. On the same day, the Dubai Gold Rate was Dh388.75, narrowing the difference to 4%. The rare event spurred curiosity among Indian tourists about whether buying gold in the UAE still made financial sense.
The root of this price drop lay in reduced gold delivery premiums in India, which were slashed unexpectedly as many jewellers—who were not hedging gold purchases—faced margin calls. This increased gold supply in India temporarily, narrowing the usual pricing gap with the UAE.
Ahmed added, “This was just a short-term change caused by market liquidity. The fundamentals remain unchanged.”
UAE remains a top destination for Indian gold buyers due to consistent price advantage.
Indian tourists are still among the biggest gold-buying demographic in the UAE, accounting for 30%–40% of monthly gold sales in some cases. Despite India’s decision in July 2024 to slash gold import duty from 15% to 6% to combat smuggling, the UAE continues to offer better pricing — a major draw for visiting shoppers.
“The duty cut helped, but unless it goes even lower, the UAE will continue to be the more attractive gold shopping destination,” said a Dubai jeweller. “We expect the April situation to remain a one-off event.”
