Gold Price Predictions in the UAE

Gold Prices in the UAE: Rise After Decline?

Residents of the United Arab Emirates (UAE) and those interested in the gold market are currently experiencing an exciting period. The price of gold per ounce recently reached an impressive peak of $4,500 but then sharply declined. The question now is whether this is a lasting correction or just a temporary pause before further rises. Some experts lean toward the latter, believing that the gold market has not yet made its final statement.

Short-Term Decline, Long-Term Rise?

Gold prices closed at $4,080.78 over the weekend, representing a 2.62% decrease from the recent peak. In the UAE market, this meant that the price per gram of 24-karat gold fell to 492.25 dirhams, and 22-karat gold to 455.5 dirhams. Local markets are therefore directly feeling global price movements, with many buyers watching developments eagerly.

Experts view the current decline as a healthy correction. A common opinion is that the price could drop to $3,700-3,800 per ounce before it resumes an upward trajectory. However, this volatility is not unusual in the gold market, which traditionally reacts to geopolitical, economic, and monetary changes.

What Drives Gold Globally?

The weakening dollar, rumors about the Federal Reserve's asset purchase program, and potential interest rate cuts are all factors that favor the price of gold. A 60% price increase since early 2025 could potentially be the second-strongest annual performance in the history of the precious metal, right after 1979.

If central banks continue to cut interest rates, this could lead to a decrease in government bond yields and further weakening of the dollar, providing another boost for gold prices. Such monetary stimuli traditionally benefit precious metals, especially when stock markets are volatile and investors turn to safer assets.

Gold Reserves and Geopolitics

Global economic tensions are increasingly driving investors towards gold. Countries like China and other emerging economies are amassing greater gold reserves, reducing reliance on the dollar. Meanwhile, U.S. tariffs and economic policies pose risks that many are trying to counteract by purchasing gold.

The trend is complex: while some investors are selling to realize profits, others are thinking long-term and believe gold could set new records in the coming years—possibly reaching the $4,900 or $5,000 mark by 2026–2027.

What Does This Mean for UAE Residents?

Gold plays a crucial role in the UAE not only as an investment but also culturally. Weddings, holidays, and gifting often involve purchasing gold jewelry, so price fluctuations affect not only investors but also everyday consumers.

Many hold off when prices soar and become active again when there is a decline. This consumer behavior significantly influences the dynamics of gold trading, especially in places like Dubai's famous gold market.

Too Much Gold? Market Sentiment Dichotomy

Although the overall trend remains upward, the recent correction indicates that not everyone is optimistic. Some analysts believe the market is "saturated" with gold, and we are witnessing a standoff. The battle between bears (sellers) and bulls (buyers) is apparent in daily price movements: some days see rises, others sharp declines.

Some investors feel that the likelihood of Fed rate cuts in December has decreased, which could strengthen the dollar and devalue gold. However, others fear that upcoming U.S. economic data will show a significant downturn, initially boosting gold prices, but potentially causing a collapse later.

What to Expect in 2026–2027?

Long-term forecasts suggest gold prices may rise to $5,000 over the next two years. Several factors could contribute to this: protection against inflation, geopolitical uncertainties, increasing gold reserves, and central bank policies.

Gold thus continues to play a significant role in the financial world, and it seems that UAE residents should also keep an eye on developments. The current correction offers an ideal entry point for those looking to invest in gold for the long term.

Summary

The gold market has always been one of the most exciting and closely watched segments in the investment world. The current price drop does not necessarily mean bad news—in fact, for more experienced investors, it could be another opportunity to enter. The future of gold is not yet written, but signs suggest that the story is far from over. Both in Dubai and throughout the UAE, this special precious metal continues to garner significant interest.

(Source based on analysts' opinions.)