How to Avoid Frauds in Dubai Gold Souk When Buying Gold

Dubai is known as the “City of Gold,” offering some of the best deals on gold jewellery, bars, and coins. The Dubai Gold Souk, one of the most famous gold markets in the world, attracts thousands of buyers looking for quality gold at competitive prices. However, with the sheer number of gold traders and the high value of transactions, fraudulent practices can occur.

Whether you are a tourist or a resident, it’s crucial to be cautious when purchasing gold in Dubai Gold Souk or any other market. Here are essential tips to help you avoid scams and make a safe purchase.

Buy from Certified Sellers

Always purchase gold from well-known and certified dealers. Visit government-regulated gold markets like the Dubai Gold Souk or authorised jewellery stores. Look for certification from the Dubai Gold and Jewellery Group or the Dubai Central Laboratories Department to ensure authenticity.

While Dubai is famous for its gold markets, avoid buying gold from unauthorised street vendors. Also, if you visit a gold jewellery shop via an agent, you may have to pay a commission on your purchases from the shop.

Verify the Gold Purity

Gold purity is measured in karats (e.g., 24K, 22K, 18K). Ensure the gold piece you are buying has a hallmark stamp indicating its purity. You can also request a purity certificate and have the gold tested at a Dubai government-approved testing centre if needed.

Dubai uses advanced laser technology for purity testing, ensuring the gold’s authenticity without causing any damage to the jewellery.

Check the Market Price

Gold prices fluctuate daily based on the global market. Check the current gold rate on official platforms like the Dubai Gold & Jewellery Group’s website before purchasing. If a deal seems too good to be true, it probably is.

Understand the Making Charges

Gold prices in Dubai are based on the weight and purity of the gold. However, jewellery also has making charges, which vary significantly based on design, craftsmanship, and brand. Unlike gold, which has a transparent price displayed in stores, making charges is where jewellers earn the most profit.

In Dubai, making charges can range anywhere between 0% to 50%, depending on the intricacy of the design. This is often much higher than in India, where making charges are generally lower. To avoid overpaying, always clarify the making charges upfront before finalising your purchase.

Some stores offer 0% making charges, especially on gold bars and simple jewellery designs. If you are looking for the best deal, seek out these shops to maximise savings.

Get a Proper Invoice for a VAT Refund

A legitimate gold transaction should include a detailed invoice specifying:

• Gold weight and purity
• Price per gram
• Making charges
• Seller’s name and contact details
• Any applicable VAT (Value Added Tax)

Having a receipt is crucial for resale or authentication purposes. Additionally, keeping this invoice is important as it allows you to claim a 5% VAT refund at the airport for your gold purchase. However, this refund is only applicable for gold bought from certified shops and does not apply to online purchases.

To qualify for a VAT refund, the shop must provide a barcode sticker on the back of your receipt along with an official VAT refund form. Without this barcode, you won’t be eligible for the refund.

Read More: Dubai Gold Price vs. India: How Much Can You Save After Import Duty?

Conclusion

Buying gold in Dubai can be a great investment and a memorable experience if done correctly. By following these precautions—buying from reputable dealers, checking purity, verifying prices, and demanding proper documentation—you can avoid fraud and ensure a safe purchase. Always stay informed and cautious to make the best out of Dubai’s thriving gold market!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.