Buying Gold in Dubai: Gold Souk, Prices and Making Charges

In Dubai many sellers post the gram price for each karat in dirhams, then add the making charge and tax if any, and bargaining over the making charge is a customary part of the gold souk experience. Buy once you know the gram price and have compared several shops, and ask for a detailed invoice stating the weight, karat, making charge and tax before you leave the shop.

The gold souk and the shops

Dubai is known for its many gold markets and shops, among them the traditional gold souk, where numerous shops stand side by side and display their prices clearly on boards, so it is easy to walk past more than one shop and compare. There are also shops in shopping malls and neighbourhoods, and the designs vary to suit different tastes, from Gulf and Arab styles to Indian and European ones.

This variety is an advantage for the buyer, but it calls for a plan: know the kind of piece you want and your approximate budget, and compare offers by the numbers, not by impression. Whether you are a resident or a tourist, the basic rules for buying safely are the same.

How are prices posted?

It is common for a shop to post the gram price for each karat (often 24, 22, 21 and 18) in dirhams, and the posted price changes during the day. The price of a piece is usually worked out like this: weight × gram price + making charge (+ tax). Pieces may be offered at a lump-sum price or at a gram price that includes the making charge, so ask each time what the figure includes.

Before your tour, you can follow the gold price today in the UAE to get a picture of the rough range, remembering that it is an indicative price and the actual price in the shop may differ from it. As for the piece that catches your eye, estimate the value of the gold in it yourself with the gold calculator before you hear the total.

Karats

The karat expresses the proportion of pure gold. 24K (about 99.9%) is usually offered in bars and coins, 22K (91.7%) is very common in jewelry, and 21K (87.5%) and 18K (75%) are also offered, the latter widespread in modern designs and stone-set pieces. If you compare the price of two pieces, make sure they are the same karat, since the gram price differs from one karat to another.

Making charges and bargaining

The making charge is the cost of workmanship and design plus the shop's margin, and it is what is most often negotiated. The value of the gold itself (weight × gram price) usually leaves less room for negotiation, while the making charge varies with the design, the method of manufacture and the weight of the piece.

• Ask for the making charge separately and per gram, and do not settle for the total price.
• Compare two or three shops for a similar piece.
• Ask whether the making charge falls if you buy more than one piece, and whether the price differs by method of payment.
• Heavy simple pieces usually carry a lower making charge per gram than light delicate ones.
• Be polite and clear: bargaining is a business conversation, not a quarrel.

For more on how the making charge is calculated and negotiated, see our article on gold making charges.

Tax and tourist refunds

Tax applies to many purchases in the country, and the treatment of jewelry may differ from that of investment gold; we do not state rates or detailed rules here because they may change. Ask the seller: does the price include tax? On which part was it applied? And ask for it to appear on its own line of the invoice.

A scheme to refund tax to tourists on eligible purchases from participating sellers may be available, under set conditions and procedures. Do not assume gold is covered by it, or that every shop takes part; ask the seller before paying, and check with the official authority for the current conditions and procedures.

The invoice and the guarantee

Ask for an invoice stating the description of the piece, its weight, karat, gram price, making charge, tax, total, date and the shop's details. If the shop gives you a guarantee card or a certificate, keep it with the invoice. And ask about the exchange and buy-back policy in writing, since it is what you will need most if you change your mind. For an explanation of every line, read how to read a gold invoice.

General notes for tourists

• Compare with what you know at home: know roughly the gram price in your own country for the same karat, but compare with care, since karats, making charges and taxes differ. Why gold prices differ between countries may help.
• Watch the currency: make sure the price shown is in dirhams or a currency you know, and that you convert the figure accurately.
• Check your country's customs: they may require a declaration or fees above certain limits, and they differ from country to country.
• Ask for adjustments early: if the piece needs resizing, ask how long it takes before your departure date.
• Inspect the piece before leaving: check the clasp, the weight and the karat, and that what is in the box is what you bought.
• Deal with a fixed shop: keep away from passing offers from people who have no known shop and no official invoice.

Payment and receipt

Before agreeing on the price, ask which methods of payment are accepted, whether the price changes with the method, and whether fees are added. Make sure the amount written on the invoice is the amount you actually paid, and keep the payment receipt with the invoice. When travelling, put the invoice somewhere easy to reach, since you may need it at customs inspection in your own country.

After buying

Ask for the piece to be wrapped carefully, and check the contents of the bag or box before leaving. Photograph the piece and the invoice, and keep the photos somewhere separate. If you plan to resell the piece later in your own country, ask a dealer there how it would be priced, since taking a piece back to another country may mean a difference in price, making charge and the karats in demand.

A worked example

For illustration only, suppose you want a bracelet weighing 12 grams in 22K, the gram price in this example is 350 dirhams, the making charge offered is 30 dirhams per gram, and a hypothetical 10% tax applies to the making charge alone. These are teaching figures, not today's price and not an official rate.

The difference is about 79 dirhams, all of it from the making charge, while the price of the gold did not change. That is what it means to negotiate on the right line.

A checklist before paying

The prices and figures in this guide are indicative and for illustration only, and are not a recommendation to buy or sell. Check current prices and rules with the seller and the official authorities before any transaction.