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As Diwali approaches, the festival of lights illuminates more than just homes, it shines on gold, a time-honored symbol of prosperity that is experiencing an unprecedented global rally. For millions in India, the UAE, and around the world, this Diwali is marked by soaring gold prices, strategic buying patterns, and a fusion of cultural devotion with savvy investment decisions.
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Gold has always held a unique position at the crossroads of culture and finance. In many parts of the world, especially in India, gold is far more than a precious metal; it is a cultural asset, a store of wealth, and a symbol of auspicious beginnings. The tradition of buying gold during Diwali, particularly on Dhanteras, is steeped in the belief that such purchases invite prosperity and good fortune into the home. This year, that timeless tradition coincides with an extraordinary phase in the global gold market, one of the strongest bull runs in recent memory, with prices having surged more than 44 per cent year-to-date.
This remarkable rally has amplified the significance of gold beyond cultural reverence. Investors and consumers alike are weighing their options between traditional jewellery and more liquid, pure forms of gold such as bars, coins, and increasingly popular digital gold options. The festive period has become a telling moment for the global gold market, reflecting shifts in consumer behaviour, market dynamics, and broader economic trends.
Bullion rally meets festive fervour
2025 has been a landmark year for gold prices. The metal crossed the historic milestone of $4,000 per ounce for the first time earlier this month, registering a price increase of more than 50 per cent compared to the same period last year. This surge is driven by a complex mix of factors. Geopolitical tensions remain elevated worldwide, creating an environment of uncertainty. Central banks across the globe are responding by accumulating gold reserves at record rates, including China, which has now recorded ten consecutive months of central bank gold purchases. These actions underscore gold’s enduring reputation as a safe haven asset.
Vijay Valecha, CIO at Century Financial, emphasises the dual role gold plays, especially in India. “Gold jewellery has deep cultural and emotional significance but comes with extra costs such as making charges, VAT, and generally lower purity,” he explains. “In contrast, gold bars and coins offer higher purity and liquidity. Moreover, digital gold ETFs are gaining traction for investors seeking pure price exposure with minimal costs.”
This year, the contrast between gold and equities in India is stark. The Nifty index has recorded only modest gains of about 5.7 per cent year-to-date, while gold’s returns have significantly outpaced the stock market. Additionally, the depreciation of the Indian rupee by over 3.5 per cent against the US dollar provides a dual advantage to Indian buyers, enhancing the appeal of gold as both a cultural purchase and an investment hedge.
India’s gold imports surged to $5.2bn in August, a nine-month high and 37 per cent higher than July, highlighting strong seasonal demand despite elevated prices. Tax cuts on gold jewellery and bullion are also expected to further support festive buying this Diwali, making this a particularly significant year for the metal.
Diwali 2025: Tradition faces new realities
For millions of Indian expatriates in the UAE and across the Indian subcontinent, the upcoming Diwali celebrations pose a unique challenge. Traditionally, buying gold during Diwali is an auspicious ritual that symbolises hope, wealth, and new beginnings. However, with prices hitting historic highs at $4,164 per ounce, buyers are now grappling with the balance between cultural devotion and financial pragmatism.
Farhan Badami, business development manager at eToro, describes 2025 as “a wild ride” for markets worldwide. The backdrop of geopolitical tensions, trade wars, and currency volatility has pushed central banks to hoard gold at an unprecedented pace. “Gold is the ultimate safe haven when other assets feel unstable,” he says. “This Diwali is historic because it’s the first time the festival coincides with gold prices at such record highs.”
Badami highlights a shift in consumer psychology. While jewellers report brisk business, buying patterns have evolved. “Instead of purchasing heavy, ornate jewellery, many customers are opting for smaller gold coins or lighter pieces. Others are spreading their purchases across the year rather than splurging during the festival alone.”
An interesting financial manoeuvre has emerged among Indian residents in the UAE: many are utilising rupee-linked bank accounts to benefit from currency arbitrage, helping to ease the cost burden of expensive gold. This strategic approach reflects a broader trend where buyers are not just driven by tradition but are incorporating market realities into their decisions.
Dubai Gold Souk: A global barometer of demand
The Dubai Gold Souk Extension, renowned for its VAT advantages, assured purity standards, and vast variety, has become a focal point for Indian gold buyers worldwide, especially during Diwali. This year’s mega Diwali celebrations, running from October 17 to 26, feature an array of promotional offers designed to sustain momentum despite record gold prices.
The Souk is offering shopping vouchers worth Dh150,000, alongside reduced making charges, diamond discounts, and specially launched festive collections tailored to entice buyers. Farhan Badami notes, “What happens in Dubai during Diwali often signals broader trends in the global gold market. Right now, the signal is clear: demand remains resilient, but buyers are being strategic.”
Despite the high gold prices, jewellers report a healthy festive season. The key to this success lies in the evolving buying behaviour of customers. Karim Merchant, CEO and MD of Pure Gold Group, explains, “The Diwali season remains one of the most significant periods for jewellery purchases and is performing even better than expected this year. Customers are celebrating meaningfully by choosing lighter jewellery, gold coins, and strategically spreading their purchases over time.”
Merchant highlights how Pure Gold Jewellers blends tradition with modernity through its collections. “We mark every season, including Diwali, with new designs that reflect craftsmanship and contemporary elegance. This year, our Diwali promotion offers up to 75 per cent off on select exclusive jewellery pieces across all our stores, allowing customers to celebrate the festival with timeless beauty and value.”
Exclusive Diwali offers and festive hospitality
The Dubai Gold Souk Extension, home to over 295 stores specialising in gold, jewellery, perfumes, and watches, is making this Diwali a truly rewarding shopping experience.
From October 10 to 26, customers spending Dhs500 or more at gold, jewellery, and watch stores can enter a raffle to win gold coins and bars, with two winners selected weekly. Promotions include zero or discounted making charges at Popley Jewellers and Ziya Gold & Diamonds; 10 per cent off gold prices at Kanz Jewels; and a unique offer from Thangals Jewellery where customers can lock in today’s gold rate for a month by paying just 10 per cent.
Other festive offers feature up to 60 per cent off diamonds and jewellery at Ziya Gold & Diamonds and Motiwala Gold Jewellers; old gold exchange and shagun promotions at Tanishq; and Dhs100 cash vouchers on diamond and gemstone jewellery purchases worth Dhs3,000 or more at Malabar Gold & Diamonds.
Adding to the festive spirit, select stores are offering exclusive gifts such as complimentary gold coins and diamond rings.
Gold’s medium-term outlook remains bullish, supported by easing real interest rate expectations, ongoing geopolitical uncertainties, and strong festive demand. As investors and consumers blend tradition with market realities, gold continues to hold its unique position as both a cultural symbol and a strategic financial asset.
This Diwali, gold shines not just as an emblem of festivity and heritage but also as a reflection of savvy financial stewardship. With global markets buffeted by volatility and uncertainty, gold’s dual role as a store of value and symbol of prosperity resonates more deeply than ever before.
