Dubai's Gold Market: A Surge Story

Gold Price Surge in Dubai: What's Driving It and How Long Can It Last?

Over the last 19 months, gold prices have shown an almost unbroken increase – according to current market trends, prices have risen nearly 1% per week and around 10% per quarter. Not only global macroeconomic uncertainties are behind the growth, but also the growing fear of missing out ("FOMO") on profits. Dubai's gold market has become one of the most striking examples, as not only tourists but also the local population are active participants in this gold rush.

Gold at its Peak – Historical Records

On Wednesday in Dubai, a new record was set: the price of 24-karat gold rose to 468.25 dirhams per gram, while 22-karat closed at 433.75, and 21-karat at 416 dirhams. Globally, spot gold prices approached $3,900 per ounce. This peak follows the breakthrough in March 2024, when prices surpassed the long-standing resistance level of $2,075.

Before the explosive price increase, the gold market had been moving within a wide range ($1,625 to $2,075), indicating the stabilization of prices. Several factors preceded the breakout: central banks' increasing gold purchases, rising U.S. interest rates in the fight against inflation, and institutional investors' portfolio rebalancing.

Gold Returns – By the Numbers

Over the past year and a half, gold prices have risen an average of 0.8% weekly, 3.5% monthly, and nearly 10% quarterly. The strongest growth was observed in the third quarter of 2024 (13.2%), the first quarter of 2025 (19%), and the third quarter of 2025 (16.8%). These figures clearly show that gold has once again become investors’ favorite safe haven.

In the longer term, annual returns hover around 20%, a remarkable feat for an asset class considered safe. Particularly March and October stand out as strong months, while February, June, and November are weaker – this seasonality is also part of long-term strategies.

FOMO and the Role of Retail Investors

One of the most intriguing aspects of the current price surge is the heightened interest from retail investors. The "FOMO" – fear of missing out – has ushered in a new wave of small investors, primarily through gold-based exchange-traded funds (ETFs). ETFs offer an opportunity for anyone to invest in gold easily and safely, without having to physically own it.

Globally, gold ETF holdings have increased by 16% this year, reaching 96.7 million ounces, the highest level since October 2022. According to the World Gold Council, in the first half of 2025, these funds recorded $38 billion inflows, equivalent to 397.1 metric tons of gold – the largest half-year increase since 2020.

What Can We Expect in 2025? Will Gold Hit the $4,000 Mark?

Experts believe current trends may signal a paradigm shift. If the market continues to favor tangible investment assets (like gold) over the long term, the increase is far from over. Reaching the $4,000 level in 2025 is becoming increasingly likely, especially if the Federal Reserve is compelled into further rate cuts or if geopolitical risks escalate.

The short-term strengthening of gold has already been impressive: the price has risen by 47% in 2025 to date, repeatedly hitting historical highs. Factors behind this include the weakening dollar, persistent inflation, easing U.S. interest rate policy, and geopolitical tensions (e.g., the Russia-Ukraine conflict, trade wars, new tariff measures).

Medium and Long-Term Factors

In the medium term, demand for gold is supported by structural factors. Central banks are increasingly diversifying away from the U.S. dollar and increasing their gold reserves. China, for instance, is resolutely aiming for Shanghai to become the center of global gold trading, further strengthening gold’s global significance.

In the long term, gold may play a key role in forming a multipolar monetary system, where reserve currencies become geopolitical tools, prompting investors and central banks to place more weight on owning physical assets. Global inflation cycles, rising sovereign debts, and increasing political fragmentation worldwide all suggest further strengthening of gold’s role.

Summary

Dubai's gold market has recently witnessed one of the most intense increases in prices seen in decades. The increase is driven not only by financial but also psychological and geopolitical factors. Both retail and institutional investors are reevaluating the role of gold not merely as a store of value but as a strategic haven in the changing global financial system. All signs indicate that the history of gold is far from over – in fact, it is truly beginning now.

(The article source is based on gold market prices.)