Travelers to Dubai will find it hard to miss the golden sights that adorn the city, from buildings with gold interiors, ATMs dispensing gold, gold-plated supercars, gold-infused food, to the famous gold markets.
Behind this glitz lies a long-standing gold and jewelry business with decades of history in Dubai.
Gold is widely available for sale in Dubai, and tourists can bargain.
From a young age, Mihir Vaya helped his father run the family jewelry business in Dubai.
Mihir recalls traveling across Dubai Creek on a boat with his father to sell jewelry. The Gold Souk today boasts hundreds of shops selling gold and silver, but back then, there were only a few rickety stalls by the riverbank.
Mihir helped hold gold chains while his father crafted intricate jewelry pieces. “These were small tasks, but they were very important to me,” Mihir told CNN. “Since then, I have been attached to the craft of gold jewelry making.”
The Gold Souk is one of the most famous gold markets in the world.
Ashwin Vaya, Mihir’s father, is one of the thousands of gold traders, jewelers, artisans, and entrepreneurs from India who flocked to Dubai in the late 20th century to capitalize on the booming gold industry.
Visionary individuals like Vaya’s father, along with other immigrants from around the world, transformed Dubai into an international hub for gold.
Since the 1970s, the discovery of vast oil reserves has completely changed Dubai’s fortunes. The enormous oil revenues have dramatically transformed Dubai, leading to a surge in entertainment and shopping demands among its residents. For the people of Dubai, buying gold and jewelry is a way to showcase their affluence and spend their wealth.
Mihir Maya came to Dubai to start a business with his father in the 1970s.
Before the Covid-19 pandemic, gold and other jewelry accounted for 20% of the total non-oil exports of the United Arab Emirates (UAE), most of which came from Dubai. It is estimated that 20% to 40% of the world’s gold reserves “flow through” Dubai each year.
The Luxurious City of Gold
Jayant Javeri recalls his early days establishing himself in Dubai. Originally from Mumbai, India, Javeri arrived in Dubai with his brother in 1971, the same year the UAE was officially formed. The Javeri family operated a foreign exchange company, but the two brothers wanted to carve out their own path by trading in gold.
They opened their first store in Dubai, primarily handling gold transactions from their grandfather’s company.
By 1990, noticing a surge in gold consumption in the Gulf region, the brothers established Javeri Jewelry, the first gold store in the Meena Bazaar area of Dubai.
In the following years, as information spread widely in India, thousands of others came to Dubai to trade in gold, hoping to achieve similar success as those before them. The 1990s marked the peak of the gold rush in the UAE.
Gold is everywhere in Dubai.
The vast markets that brought together gold traders, diamond merchants, and jewelers during this period have shaped Dubai into what it is today.
Dubai is dubbed the “city of gold” due to its low prices, tax exemptions, and lack of government control compared to other countries. It wasn’t until 2018 that a 5% VAT was introduced in Dubai, the only tax imposed on the gold market. Tourists are allowed to claim refunds to encourage tourism.
Today, gold prices in Dubai fluctuate with the international market. However, customers still have the right to bargain as they did in the past.
The Secret to Success
A gold-dispensing ATM in Dubai.
For most gold traders in Dubai, the secret to success lies in a loyal customer base and relationships built over decades.
Once customers arrive in the gold district, they tend to spend money when they are satisfied, rather than hopping between different shops to bargain. The rate of return customers buying gold or jewelry is very high.
Mehul Pethani is a seasoned trader and understands this better than anyone.
Mehul is present at his gold shop every day, welcoming regular customers. The Indian man moved to Dubai in 2007, hardly spoke English, and knew nothing about gold, silver, or diamonds, having grown up in a farming family.
A gold-plated Lamborghini Aventador in Dubai.
Fourteen years later, Mehul has become one of the most sought-after gold traders in Dubai. Mehul states that 90% of his customers are regulars.
“It all comes down to honesty and transparency with customers,” Mehul explains. “No matter how good your products are, be honest with them so they know they are getting a good deal.”
This also means no need to bargain; customers who come to Mehul know they are offered the best prices. “It’s common for customers to buy jewelry at prices much lower than the initial quote,” Mehul said.
Gold-covered steak.
After decades of thriving gold business in Dubai, the Covid-19 pandemic brought everything to a standstill.
In 2019, the price of gold was around $1,200 per ounce, but it surged to $2,000 per ounce in 2020 and currently hovers around $1,900 per ounce.
Rising prices and a paralyzed tourism sector caused Mehul’s revenue to drop by 40%. Mihir and his family also experienced six months of gloom, unsure when their business would bounce back.
