Gold Market Soars in Dubai: New Highs

Dubai's Gold Market Hits New High: Over 450 Dirham Per Gram

The price of gold has reached another historic high in Dubai, as for the first time ever, the price of 24-karat gold per gram exceeded 450 dirham. This event has not only attracted the attention of local jewelry traders and investors but has also brought the economic interest of the entire region into focus. The surge is driven by a complex series of interdependent factors that also define gold's role in today's global economic environment.

New Peaks Every Day

According to the Dubai Jewellery Group, the price of 24-karat gold reached Dh451.75, although it later slightly slid back to Dh451.0. Other types of gold such as 22K, 21K, and 18K also reached historic levels, with the former at Dh418.5, 21K at Dh401, and the latter at Dh344 per gram. Notably, the 21K type broke through the Dh400 mark for the first time, which serves as a psychological price point for many jewelry buyers in Dubai.

Simultaneously, similar movements occurred in the global market, with the spot gold price exceeding $3,749 per ounce, approaching the $3,760 peak during trading. This growth is not the result of a single fluctuation but a consistent upward trend fueled by massive investor interest.

What Drives the Price Explosion?

Several factors contribute to the rising price of gold, collectively creating this upward trajectory. One of the most critical elements is macroeconomic uncertainty. Global inflation remains volatile, energy prices have not stabilized, and geopolitical tensions are increasingly impacting financial markets.

Central banks worldwide play a significant role in this process. In just the first half of 2025, central banks purchased a total of 410 tons of gold: 244 tons in the first quarter and 166 tons in the second. This trend has been ongoing since 2022, showing that hoarding gold as a reserve remains a prime strategy worldwide.

Moreover, the Federal Reserve's decision in September to reduce the benchmark interest rate by 25 basis points gave gold another boost. Although the central bank indicated that future decisions will still be based on inflation and labor market developments, the market interpreted this signal as the end of tightening cycles, further increasing demand for gold.

Geopolitical Risks and Investor Flight

Growing tensions around the world further strengthen gold's role as a safe haven. The situation in the Middle East, particularly the conflict in the Gaza Strip and the diplomatic activity between the United States and Arab countries, adds to investor concerns. Concurrently, the Russia–NATO relationship is becoming increasingly tense, especially due to airspace violations.

Such unpredictable and often rapidly escalating events divert investor attention from traditional financial instruments to gold, as the precious metal has served the purpose of wealth preservation and value stability for centuries.

Speculative and Institutional Buying

In recent months, every pullback in the gold market has been immediately followed by buying. Both speculative and institutional investors have actively responded to market events, with even the slightest price drop sparking new demand waves. This indicates a deep conviction in the market regarding gold's role and long-term value.

In Dubai, this trend is particularly noticeable, as the city's jewelry market is among the most critical in the world, where not only locals but also tourists purchase significant volumes of precious metal jewelry, investment gold, and gold coins. Thus, the price movements observed here are not just local phenomena but reflect global trends.

What Does This Mean for Buyers?

For buyers, this period presents both challenges and opportunities. Those purchasing for the long term, such as gifting gold jewelry to children or buying for investment purposes, currently face high prices. However, if gold continues to rise—which many analysts do not rule out—today's price levels may still prove favorable later.

Many believe that gold’s current role has strengthened due to the global economic restructuring. The rise of digital currencies, increasing national debts, and the questioning of the dollar's global position all bring physical, tangible value stores back into the limelight—and among these, gold remains the top choice.

Dubai as a Global Gold Market Reference

Dubai isn't known as the city of gold for nothing. The regulatory environment here, tax exemption, and the presence of buyers and traders from all over the world create a unique market dynamic. The density of gold jewelry shops, daily pricing transparency, and pricing by fineness contribute to Dubai's pricing acting as a global compass for the gold market.

Thus, the current record high prices are not just symptoms of a local phenomenon but clearly indicate where the world’s economic thinking is heading: towards safety, stability, and long-term value seeking. And if there’s a place to spearhead this trend, it’s Dubai—where gold is not just a commodity but an identity.

(Source of the article is based on data from the Dubai Jewellery Group.)