Gold Prices Soar to Record Highs in UAE

Gold Prices Soar to Record Highs in UAE: What's Behind It and What to Expect Nearing 2026?

The gold market in the United Arab Emirates has once again captured the spotlight after breaking new price records for three consecutive days. On Wednesday morning, the price of 24-karat gold reached 542 dirhams per gram, marking an increase of more than 20 dirhams within a week. This dramatic price hike is not an isolated event but a result of complex international and regional economic processes, born at the intersection of global investor sentiment, geopolitical tensions, and changes in monetary policy.

Gold Price Surge: New Peaks Every Day

Over the week, gold has not only strengthened but also displayed dynamic growth that has surprised even seasoned investors. Alongside 24K gold, the prices of other purities have also risen: 22K reached 502 dirhams, 21K was at 481.25 dirhams, 18K was at 412.50 dirhams, while 14K gold settled at 321.75 dirhams by Wednesday morning. Spot prices followed the trend as well, with the price of gold per ounce reaching $4,496.42, accounting for a 0.41 percent increase in a single day. Simultaneously, the price of silver jumped significantly, surpassing the $72 mark.

Geopolitical Background: Fear Drives Prices

One of the main drivers of the markets currently is the escalation of geopolitical tensions. The resurgence of rhetoric surrounding the Israel-Iran conflict in the Middle East, along with the possibility of American military intervention in Latin America, intensifies global uncertainty. In such situations, investors traditionally turn towards safe assets — and for millennia, gold has been one of the safest currencies. Even when bond markets or stock indices point in a different direction.

The increase in risks has clearly revived the demand for gold, and non-yielding assets — like gold and silver — have come to the forefront again.

Monetary Policy Impact: Rate Expectations and the Fed's Role

Central banks worldwide, especially the United States Federal Reserve, are key players in this process. The market currently anticipates that the Fed may lower interest rates sooner and more significantly than expected, particularly in light of the latest inflation and labor market data. This speculation reduces the opportunity cost of non-yielding assets like gold, thus enhancing their appeal to investors.

As rate expectations ease, investors are more inclined to park their capital in assets that historically retain value during crisis situations. Gold is such an asset.

The Bond Market Paradox: Why Isn't Gold Falling?

Interestingly, gold’s strength continues despite the fact that U.S. 10-year Treasury yields remain at high levels — a factor that typically negatively impacts gold. Additionally, bond market volatility (MOVE index) is nearing 2021 lows. This means that the market doesn’t seem too uncertain, yet gold is soaring.

This paradox suggests that gold’s rise is not driven primarily by bond market mechanics but by a deeper, structural increase in demand. Investor confidence is shaken, risk aversion has strengthened, and gold once again assumes the role of a “safe harbor.”

International Trends Play a Role: North America Leads

North American markets have shown continuous net inflows towards gold funds over the past six months. In November, this figure already amounted to $1 billion, thanks to rising prices, Fed rate-cutting expectations, and geopolitical risks. If this trend continues, the current breakout in gold prices will not just be a temporary correction but the start of a longer-term upward cycle.

How is the Dubai Market Responding?

Dubai has traditionally been a global center for gold trading, especially through Deira Gold Souk and newer commercial hubs. Both locals and tourists are accustomed to buying gold, whether it’s wedding jewelry, investment bars, or even for daily gifting customs.

However, the price surge is changing purchasing habits. While demand hasn’t disappeared, it has transformed: buyers are interested in smaller quantities of higher-quality gold jewelry with a more refined design. Many are turning to investment gold, particularly 24K gold bars and coins. Gold continues to be present at all life levels, but more consciously, taking future value growth into account.

Summary: Steady Rise or Another Bubble?

Gold’s rise doesn’t appear to be a bubble — for now. The underlying factors — geopolitical instability, easing monetary policy, global risk aversion — are all real and deeply embedded in the current economic situation. If the trend continues, gold will not only be popular in the short term, but it may also emerge as a strategic asset in investor portfolios over the long term.

For Dubai, this offers another opportunity to further strengthen its position on the global gold trading map. The gold market boom affects not only traders and jewelers but the entire economic ecosystem, from tourism to exports. The coming months and years will show whether gold is truly entering a new golden age — not just in terms of price but also in its social and economic role.

(The article is based on accounts from gold market players.)