How Country-Specific Realities Are Rewriting Demand for Gold and Silver?

The price surge in precious metals during 2025 did not simply lift gold and silver to new highs; it fundamentally changed how people in different countries interact with these metals. What is striking is not just the scale of the rally, but the consistency of one outcome across very different markets: jewellery is losing ground to bars and coins. Yet this shift is not driven by a single global logic. Instead, it reflects a mosaic of national circumstances—tourism flows, tax systems, inflation histories, currency weakness, and deeply rooted cultural habits—that together are reshaping physical demand.

In the United Arab Emirates, and especially in Dubai, volatility has reinforced the city’s long-standing reputation as a highly sophisticated physical gold market. Local retailers describe buyers as unusually well informed, closely following global prices rather than reacting emotionally to headlines. Sharp intraday moves—such as drops of more than 20 dirhams per gram in a single session—are not interpreted as warning signs but as tactical opportunities. Jewellery volumes have softened as prices became harder to justify for discretionary spending, yet investment demand has remained firm. Coins and bars, particularly in 24-karat form, are increasingly preferred because they eliminate making charges and offer immediate resale value. Smaller denominations, typically between 1 and 10 grams, dominate sales, reflecting a desire for flexibility rather than maximum weight.

Tourism plays a decisive role in Dubai’s market structure. Around 90–95% of gold buyers are visitors, many from South Asia, the Middle East, and Africa. These buyers cannot afford to wait for price corrections and typically purchase regardless of short-term volatility, drawn by Dubai’s competitive pricing, trusted purity standards, and wide product range. Residents behave differently: they monitor prices more closely and often delay purchases, although this strategy has frequently backfired in 2025 as prices resumed their upward trend after brief pullbacks. The result is a market where jewellery demand ebbs and flows, but bullion demand acts as a stabilising force.

Singapore illustrates how policy and taxation can accelerate behavioural change. In 2025, jewellery sales by volume fell roughly 8% year-on-year, marking one of the weakest periods for ornament demand in recent memory. At the same time, purchases of gold bars and coins surged by about 47%. A key driver is the exemption of investment-grade bullion from Goods and Services Tax, a benefit not extended to jewellery. For many consumers—particularly retirees and older households—this has tilted the cost-benefit calculation decisively toward bars. Retailers report a rise in trade-ins of old jewellery as families monetise past purchases at high prices rather than committing to new ones.

To adapt, jewellers have reworked their business models. Lightweight pieces under 3 grams, hollow designs, and minimalist styles have replaced the heavier chains and bangles that once dominated showcases. This shift allows stores to maintain transaction volumes while keeping total spending within reach for price-sensitive buyers. Even festive demand, traditionally resilient, has softened. In Singapore, gold is now clearly treated as an investment asset first and a lifestyle product second, a hierarchy that would have been unthinkable a decade ago.

India represents the most consequential transformation because of its sheer scale and cultural importance in the global gold market. In 2025, domestic gold prices rose more than 75%, far outpacing local equity returns, while the rupee weakened against the dollar. Jewellery consumption fell sharply—by roughly 26% in volume terms during the first nine months of the year—but this did not translate into a collapse in overall demand. Instead, investment demand for coins, bars, and exchange-traded products rose by about 13%, pushing investment’s share of total demand to around 40%, a record level.

For millions of Indian households, the logic is straightforward. Jewellery carries additional making charges of 10–20%, which become increasingly hard to justify at record prices. Small coins, often 5 or 10 grams, allow families to remain invested in gold without those extra costs. Younger consumers are also showing greater acceptance of lower-carat and lightweight designs, especially for everyday wear, reflecting a gradual but important cultural shift. Gold remains central to household savings, but the form it takes is changing in favour of financial efficiency.

The United States shows a different dynamic again: a two-way flow driven by both profit-taking and renewed accumulation. Dealers report unprecedented activity, with sellers bringing in inherited coins, old collections, and household silverware accumulated over decades. At the same time, there is strong buying interest from investors who see precious metals as protection against geopolitical tension, fiscal deficits, and financial market volatility. Since the start of 2025, gold has risen about 68% and silver roughly 156%, drawing attention not only to gold’s safe-haven role but also to silver’s industrial importance in artificial intelligence, electric vehicles, and solar power. This dual demand has helped silver outperform gold and broadened its appeal among retail buyers.

Southeast Asia, particularly Malaysia, highlights silver’s growing prominence as an alternative precious metal. As gold prices peaked, silver emerged as a more accessible entry point. Local prices jumped from around 4,000 ringgit per kilogram in early 2025 to roughly 11,000 ringgit by early 2026—an increase of more than 150%. This sparked a rush of households bringing cutlery, trays, and old objects to assayers to determine whether they contained real silver. Bullion dealers reported record sales, even as delivery times lengthened due to tight physical supply. Silver’s lower price per unit and its status as a critical industrial material have combined to make it attractive to both cautious savers and more speculative buyers.

Across all these markets, one pattern stands out. High prices and volatility are not driving people away from precious metals. Instead, they are accelerating a reallocation within the category—from jewellery toward bars and coins, from emotional purchases toward calculated ones. Cultural traditions remain influential, but financial logic is increasingly dominant. Gold and silver are being treated less as objects to wear and more as assets to hold: portable, liquid, and trusted in a world where uncertainty has become structural rather than cyclical.