The UAE's Golden Investment Boom: 2025 Insights

The Golden Year in the UAE: Why Many Residents Doubled Their Investment in 2025?

2025 was an unprecedentedly favorable year for the gold market in the United Arab Emirates. The gold price surged by more than 60 percent annually, attracting not only the attention of investors but also those who previously did not consider this asset a serious financial alternative. This gold rush extended to small investors, families, and even casual jewelry buyers who are now delighted to see that their previous decisions have brought significant returns.

Spectacular Rise in Gold Prices

The price of a gram of 24-carat gold was around 318 dirhams in January 2025, rising to 540 dirhams by the end of the year. A similar trend was observed with the 22, 21, and 18-carat variants which have now reached record exchange rates. This price explosion occurred in an environment where geopolitical tensions, economic uncertainties, and inflation fears had a strong impact on the global financial markets.

According to the head of commodity strategy at Saxo Bank, this growth is not without precedent. In the last two years, gold prices have soared by over 110 percent, driven by deeper changes in the global economic background: central bank policies, the strength of the dollar, interest rate developments, and inflationary pressure all contributed to gold being back in focus as a safe-haven asset.

Role and Increasing Activity of Small Investors

One of the most interesting phenomena in 2025 was that more and more residents entered the gold market who had previously only been present as buyers but did not consider gold as an investment asset. The favorable exchange rates and continuous rise news motivated them to invest smaller sums monthly in gold jewelry, coins, or gold-based ETFs.

In Dubai jewelry shops, savings programs are also available, allowing customers to pay a fixed amount monthly, then spend it on gold jewelry at the end of the year—often without manufacturing fees. This has become particularly popular among those seeking gifts with both investment and sentimental value.

These small steps now show significant returns. Those who bought 10 grams of gold a year ago for about 3000 dirhams may now face a value increase of around 5000 dirhams. This represents more than a 60 percent increase, far exceeding the annual return of most traditional financial products.

ETFs and Modern Gold Investment

Not only the purchase of physical gold has become popular, but gold-backed exchange-traded funds (ETFs) as well. These tools allow people to invest in gold online, simply, and at low cost without having to store it physically. The spread of digital solutions, fintech applications, and financial education campaigns has contributed to making gold investment more accessible to wider segments of the population.

2026: Is There More Room for Growth?

After the spectacular price rise, many are naturally wondering: how long can this momentum last? Analysts predict potential volatility at the beginning of next year. The rebalancing of major commodity indices in January is expected to trigger significant sales in the futures market, which may exert pressure on prices in the short term. This could be particularly important for the first quarter of the year when it may be determined whether the market can stabilize despite great selling pressure.

In the longer term, however, the inflationary environment, anticipated interest rate cuts, and slowing global growth could collectively create an economic environment favorable for gold. The stagflationary environment, where high inflation and low growth occur simultaneously, has historically always favored gold.

According to Saxo's analysis, it is not ruled out that gold could reach the $5,000 per ounce exchange rate by the end of 2026—a significant increase from current levels.

Central Banks and the Sustainability of Demand

It is important, however, to consider the long-term sustainability of demand. With rising prices, the value of central banks' gold reserves increases as well, which may even lead to a decrease in official purchases. This is a factor that could influence market dynamics, especially if retail demand is unable to offset the more restrained activity of institutional players.

Summary

2025 was the year of gold in the United Arab Emirates, where everyone from small investors to experienced portfolio managers could experience the significance of gold as an asset. The price rise brought not only financial gain but also a new investment attitude: people are managing their savings more consciously, and gold has once again become a symbol of safety.

Although the next year may also hold some challenges, gold's position appears stable amidst global economic uncertainties. Those who stepped in earlier can rejoice now, but it is not too late for those considering entering now—provided they carefully follow market signals and analyses.

(The article's source is based on the changes in gold prices.)

img_alt: Gold bracelets in a display window.