Gold prices in the United Arab Emirates experienced an increase, as reported by data from FXStreet. On Tuesday, the price for gold per gram was AED 554.26, rising from AED 551.73 on Monday. The cost per tola also climbed, reaching AED 6,464.73 from AED 6,435.22 the previous day.
Gold prices, measured in AED, reflect international rates adjusted for the local currency by FXStreet. Updated daily, these prices serve as a reference, although local rates might vary. Central banks globally added 1,136 tonnes of gold to their reserves in 2022, valued at about $70 billion, the highest annual purchase on record. This increase highlights the role of gold as a stabilising asset during economic uncertainties.
The Impact on Global Economics
Gold has an inverse relationship with the US Dollar and US Treasuries. A weaker dollar can increase gold prices, while economic instability often boosts its value. Changes in interest rates also affect gold prices, with lower rates typically increasing the appeal of this non-yielding asset. As gold is priced in dollars, fluctuations in the currency significantly impact its market value.
We are seeing gold rally past $4,700 an ounce, driven by its traditional role as a safe-haven asset in turbulent times. The unexpected US-EU geopolitical tensions over Greenland are creating significant market uncertainty. This has pushed investors away from riskier assets and into the perceived safety of precious metals.
For derivative traders, this means volatility is the primary factor to watch in the coming weeks. The VIX, a key measure of market fear, has spiked to over 35, a level we haven’t seen since the market turmoil of late 2024. This environment suggests that owning call options on gold futures continues to be a viable strategy, as implied volatility is likely to remain elevated.
The trend of central bank buying, which we saw accelerate back in 2022 with a record 1,136-tonne purchase, appears to be continuing. Just last week, reports indicated that the People’s Bank of China added another 20 tonnes to its reserves in December 2025, signaling that major institutions are still hedging against currency risks. This provides a strong underlying support level for the price.
Investor Strategies Amidst Market Changes
We should also monitor the inverse correlation between gold and the US dollar. With the EUR/USD holding strong above 1.1650, the dollar weakness is providing a significant tailwind for gold prices. This is happening as S&P 500 futures have fallen nearly 5% in January, confirming the classic risk-off rotation into gold.
Looking ahead, the deepening trade conflict increases the probability of a global economic slowdown. This could force the Federal Reserve to reconsider its monetary policy stance later this year. Any hint of future interest rate cuts would further fuel the gold rally, as it lowers the opportunity cost of holding a non-yielding asset like gold.
