Gold Price Differences Between Egypt, Saudi Arabia and the UAE

The global ounce of gold has one price everywhere, but the price per gram you see in Cairo, Riyadh or Dubai differs because each market displays it in a different currency and adds local elements: the real exchange rate in the market, taxes and customs duties, dealers' margins and making charges, and the level of demand. Knowing these elements makes a comparison of the "gold price today" in two countries a fair one. The figures here are for illustration and are not current prices.

The starting point: one global price

Gold is a global commodity priced in dollars per troy ounce (31.1035 grams). Whatever the country, this price is the starting point. So if everything else stayed the same, the gram price would be close once converted into one currency, and the differences come from what is added afterwards. If you want to review the calculation steps, read our article on how gold prices are calculated in shops.

Currency and the exchange-rate peg

The first and clearest difference is the currency itself. Some currencies are pegged to the dollar at a fixed rate, so gold prices in them move directly with the dollar:

• Saudi Arabia: 3.75 riyals per dollar.
• UAE: 3.6725 dirhams per dollar.

The Egyptian pound, by contrast, has an exchange rate that changes with the market, so the gold price in pounds can move even if the ounce price in dollars stays put, because the dollar rate itself has changed. This is one of the main reasons why the price of a gram of 21K gold differs from one country to another when looked at in local figures.

An illustrative example (assumed numbers)

Assume a gram of 24K gold equals 100 dollars, and the dollar equals 50 Egyptian pounds:

The figures look completely different, but they express the same value in different currencies. There is no point comparing 328 with 4,375 without converting one into the other's currency.

Taxes and customs duties

After the base price come additions that vary with local law. In general terms they include:

• Value-added tax or its equivalent on jewellery or on the making charge in some countries; how it is applied and its rate differ, and investment bullion may be treated differently from jewellery.
• Customs duties on imports: countries that import most of their gold may impose duties or restrictions that affect the final cost.
• Hallmarking and testing fees in some countries.

Do not assume particular rates; ask the shop for the components of the final price, or check the official authorities in your country.

Local demand and premiums

Local supply and demand make a difference between one market and another. In wedding seasons, holidays and religious occasions, demand for certain karats rises and their premium rises above the global price, and it may fall in slow periods. Buying preferences also differ: 21K is the most widespread karat in Egypt, while 22K and 18K are in demand in other markets, which is reflected in the variety on offer.

The making charge and the way it is calculated also differ: in some markets it is charged per gram, in others as a percentage of the price, and some markets are known for pieces with a low making charge.

Summary of the factors

Are Arab markets affected by one another?

Yes, to a large extent: travellers, expatriate workers and dealers move between markets, and global news reaches everyone at the same moment. But what keeps differences in place is that each market has its own tax and customs system, its own currency and its own buying habits. So you may see two markets move in the same direction by different amounts, especially when one has a currency pegged to the dollar and the other a floating one.

How to compare two prices in two countries, step by step

To make the comparison fair, follow these steps:

1. Convert each price into dollars (or into your own currency) using the same exchange rate at about the same time.
2. Compare the same karat: comparing 21K in one country with 22K in another gives a misleading result.
3. Add the making charge and tax to each price to get the final price of the same piece.
4. Mind the buy price when you resell: the market that gives you a better price when you buy may give you a weaker one when you resell.

Example (assumed numbers): a 21K piece weighing 10 grams. In the UAE at 321.3 dirhams per gram with an assumed making charge of 20 dirhams per gram, the total is about 3,413 dirhams. Converted to dollars at 3.6725, that is about 929 dollars. In another country the total may differ according to its making charge and taxes, and only then do you know which is actually cheaper.

Common questions about price differences

Does the difference between countries mean an opportunity for speculation? Not necessarily: transport, insurance, customs duties and legal risks can eat up the difference, and some countries restrict bringing gold in. So we give no advice in that direction here; the aim is understanding only.

Why do prices in some markets look closer to the global price? Large markets with intense competition among dealers tend to have smaller margins, while margins are wider in smaller or more restricted markets.

Tips when buying abroad

• Compare the final price, not just the gram price: add the making charge and tax, then convert everything into one currency.
• Understand customs rules in the country you arrive in: the quantity of gold allowed to a traveller and the declaration procedures differ, and duties may apply.
• Keep the invoice stating the weight, karat and making charge; it is your reference to prove the purchase and when you resell.
• Beware of differences in karats and hallmarks between countries: a local hallmark may not be easily recognised by a buyer in another country when you resell.
• Remember resale value: the making charge is usually not refunded, so buying heavily worked pieces "because the price is cheaper there" may not actually save money.
• Check the prices in your own country for comparison: gold price in Saudi Arabia, gold price in the UAE and gold price in Egypt.

Prices displayed on any site are indicative and change throughout the day; what counts is always the shop's price at the moment of the transaction.

Summary

The different "gold prices today" in different countries do not mean that the gold itself is dearer or cheaper; the currency, exchange rate, taxes, duties, making charge and demand all go into the final figure. If you convert prices into one currency and add all the costs, you will know the real difference before you decide.