Why Many UAE Residents Are Selling Gold and Silver to Buy Property or Clear Debt
Across the UAE, record volatility in gold and silver prices has triggered a noticeable shift in household financial behaviour. As precious metals surged to historic highs in January 2026 and then corrected sharply, many residents chose to cash in their holdings to reduce liabilities, fund property purchases, or rebalance their investments.
The movement has been most visible in Dubai, where long queues formed outside the Gold Souk as residents sold jewellery, bars, and silver holdings. For many, the decision was less about panic and more about timing—locking in gains and redirecting capital into assets perceived as more stable or productive in the current cycle.
Gold Prices Hit Records, Then Pulled Back Sharply
Dubai’s 24-karat gold price reached a record Dh666 per gram on 29 January 2026 before retreating rapidly. Within days, prices fell by Dh50 to Dh76.5 per gram, settling around Dh589.5. Other gold variants followed the same pattern, with 22K, 21K, 18K, and 14K prices also easing from their peaks.
Globally, spot gold slipped below $5,000 per ounce after briefly touching highs above $5,500. The pullback was partly driven by a stronger US dollar following the appointment of a new Federal Reserve chief, reinforcing how sensitive precious metals remain to global monetary signals.
Why Residents Chose to Sell
For many UAE residents, the surge in gold prices presented an opportunity to unlock value from assets that had been sitting idle for years. Jewellery received as wedding gifts or held as long-term savings suddenly carried far higher resale values.
Several residents reported selling gold at profits ranging from 25% to nearly double their original value. Rather than reinvesting immediately into precious metals, many redirected the proceeds toward practical financial goals—most notably clearing high-interest credit card balances and funding property down payments.
Rising property prices across Dubai over the past five years have reinforced this behaviour. Even as the market shows signs of stabilising, real estate continues to offer returns that outperform many global cities, making it a logical destination for capital released from gold holdings.
Property Purchases Driving the Shift
High rental costs have already been pushing long-term tenants toward ownership. The gold rally added another lever, allowing residents to convert stored wealth into equity. In several cases, proceeds from selling jewellery or silver covered a significant portion of the 20% down payment typically required for expatriate buyers.
With mortgage payments in many areas now comparable to monthly rents, the decision to sell gold and enter the property market has felt increasingly rational rather than speculative.
Silver Also Saw Heavy Selling
Silver investors followed a similar path. As prices climbed close to $94 per ounce before pulling back, many holders sold portions of their portfolios. Some cited fear-driven selling after warnings circulated on social media predicting steep corrections, while others viewed the rally as an opportunity to realise gains accumulated over several years.
Importantly, most sellers did not exit entirely. Partial sales allowed them to secure profits while maintaining exposure in case prices rebound.
The Role of Social Media and Market Psychology
Market sentiment played a significant role in the sudden rush to sell. Rapid price movements, amplified by social media commentary, created a classic cycle of FOMO during the rally followed by anxiety during the correction.
Analysts noted that much of the selling was profit-taking rather than distress-driven. Still, the episode highlighted how emotional decision-making can accelerate volatility, particularly in assets like gold and silver that react quickly to global headlines.
What the Correction Means for Buyers
For buyers, the pullback has reopened opportunities that briefly disappeared during January’s rally. While gold prices remain elevated compared to the start of the month, the cooling has reduced pressure to buy immediately.
Many households planning jewellery purchases for weddings or long-term savings are now opting for staggered buying rather than lump-sum commitments, spreading risk across time instead of chasing short-term moves.
Gold’s Long-Term Role Remains Intact
Despite recent volatility, the broader case for gold has not changed. Central bank demand, geopolitical uncertainty, and concerns around monetary stability continue to underpin long-term support for precious metals.
For UAE residents, gold remains both a cultural store of value and a financial asset. The recent correction has simply reminded investors of an old lesson: timing matters, and gains are only real when they are realised with a plan.
Conclusion
The recent surge and pullback in gold and silver prices has acted as a catalyst rather than a crisis. Many UAE residents used the moment to strengthen their balance sheets—paying down debt, funding property purchases, or reallocating capital into longer-term investments.
Rather than signalling panic, the wave of selling reflects a market demonstrateing maturity, where households actively rebalance assets based on opportunity rather than sentiment. In that sense, the shift from gold to property is less about abandoning one asset and more about adapting to where value feels most tangible today.
