Gold to keep, not to wear: Middle East jewellery demand falls 19 percent
Gold buyers across the Gulf and Egypt moved decisively out of jewellery and into bars and coins in the second quarter of 2026, according to the World Gold Council’s Gold Demand Trends published on 30 July. Jewellery demand fell in every regional market the Council reports individually, while bar and coin demand rose in every one of them.
| Jewellery demand, tonnes | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Saudi Arabia | 11.2 | 10.3 | minus 8 percent |
| United Arab Emirates | 7.7 | 5.6 | minus 28 percent |
| Egypt | 5.7 | 4.9 | minus 14 percent |
| Kuwait | 2.7 | 2.2 | minus 19 percent |
| Middle East total | 39.8 | 32.2 | minus 19 percent |
| World total | 335.3 | 278.2 | minus 17 percent |
The Council attributes the regional weakness to price: “Middle Eastern jewellery demand remained weak in Q2 as elevated prices continued to weigh on affordability.” Saudi Arabia was among the stronger performers, its 8 percent decline cushioned by pilgrimage-related tourism, wedding demand and Eid buying, with the Council noting anecdotal reports of a pick-up from mid-May as prices corrected. Egypt’s 14 percent fall is attributed to persistent inflation and currency volatility. The United Arab Emirates recorded what the Council calls a fourteenth consecutive quarterly year-on-year decline, and was one of the few markets where the value of demand fell in dollar terms as well as the volume, with the regional conflict weighing on the tourist arrivals the market depends on.
Investment demand went the other way.
| Bar and coin demand, tonnes | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Egypt | 5.9 | 6.2 | plus 6 percent |
| United Arab Emirates | 4.1 | 5.3 | plus 30 percent |
| Saudi Arabia | 3.4 | 4.2 | plus 23 percent |
| Kuwait | 1.9 | 2.4 | plus 25 percent |
| Middle East total | 31.0 | 27.2 | minus 12 percent |
The regional total in that second table needs care, and it is the most misread figure in the release. Middle East bar and coin demand fell 12 percent even though Egypt and all three Gulf markets above rose. The decline comes almost entirely from one row: Iranian demand fell from 13.1 tonnes to 6.2 tonnes, a drop of 53 percent from a high base, which on our calculation is close to seven tonnes and more than accounts for the regional fall. Read the aggregate without that row and the direction reverses.
The Council’s explanation for the investment strength is that regional geopolitical uncertainty supported safe-haven buying while the price correction later in the quarter encouraged bargain hunting. It adds a specific driver for the United Arab Emirates: India’s sharp increase in gold import duty improved the relative appeal of buying in the Emirates, an effect it expects to support the market through the second half.
Kuwait is the clearest illustration of the shift. Its bar and coin demand of 2.4 tonnes now exceeds its jewellery demand of 2.2 tonnes, having been the smaller of the two a year earlier at 1.9 against 2.7. On our calculation that is a reversal within twelve months. The Council publishes no commentary on Kuwait in either section.
Globally the picture was flat at the headline and violent underneath.
| World gold demand, second quarter 2026 | Figure |
|---|---|
| Total demand | 1,269 tonnes, unchanged year on year |
| Jewellery | 278.2 tonnes, minus 17 percent |
| Bar and coin | 307.1 tonnes, minus 3 percent |
| Central bank net purchases | 288.9 tonnes, plus 62 percent |
| Exchange traded fund flows | minus 45 tonnes, against inflows of 171.1 tonnes a year earlier |
| Average price, London afternoon | 4,506.29 dollars an ounce |
The Council prints no combined consumer total for Egypt or for any Gulf state. Jewellery and bar and coin are reported in separate tables, so any single figure describing a country’s total consumer gold demand is arithmetic performed on those two tables rather than a published number. On our calculation Egypt’s two components together came to 11.1 tonnes against 11.6 a year earlier, a fall of 4.3 percent, but that figure is ours and not the Council’s.
Strip Iran out and the regional picture inverts. On our calculation Middle East bar and coin demand excluding Iran rose from 17.9 tonnes to 21.0 tonnes, an increase of 17.3 percent. Across Saudi Arabia, the Emirates and Kuwait together, jewellery fell 16.2 percent from 21.6 tonnes to 18.1, while bar and coin rose 26.6 percent from 9.4 tonnes to 11.9. Combined across both categories those three markets bought 30.0 tonnes against 31.0 a year earlier, a decline of just 3.2 percent.
Kuwait makes the point most cleanly of all. Its jewellery and bullion demand together came to exactly 4.6 tonnes in both quarters, unchanged year on year. What changed was the split: bullion accounted for 41.3 percent of the total a year ago and 52.2 percent now, on our calculation.
Why it matters: the region did not buy less gold. It bought the same gold in a different form. Our reading is that the combined figures are the ones to watch rather than the jewellery headline – across the three Gulf markets total demand slipped 3.2 percent while its composition shifted decisively, and in Kuwait the total did not move at all. That is a change in what gold is for, not in how much of it households want. For jewellery retailers that is a squeeze on volume which price alone will not reverse; for bullion dealers it is the opposite. Central banks add the third leg, buying 288.9 tonnes in the quarter, up 62 percent, at the same time as exchange traded funds were net sellers of 45 tonnes.
Looking ahead: the Council expects India’s import duty increase to keep favouring purchases in the Emirates through the second half, which would support Gulf bullion demand independently of the price. Third quarter figures are due at the end of October.
Sources: World Gold Council, Gold Demand Trends Q2 2026, 30 July 2026, tables 2 and 3 and the jewellery and investment sections.
