Gold prices in the United Arab Emirates increased on Monday. The price per gram of gold was 520.05 AED, rising from 511.49 AED last Friday.
The price per tola rose to 6,065.78 AED, compared to 5,965.93 AED previously. FXStreet calculates these using international rates adjusted to the local currency.
Gold As A Safe Haven
Gold plays a long-standing role as a store of value and medium of exchange. It is often seen as a safe asset during turbulent times, and a hedge against inflation and currency depreciation.
Central banks hold the largest gold reserves, using them to diversify their holdings and strengthen economic health perceptions. In 2022, they added 1,136 tonnes of gold worth about $70 billion, marking the highest yearly purchase recorded.
Gold typically inverses with the US Dollar and Treasury yields. A weak dollar usually boosts gold prices, while its strength may suppress them. Geopolitical factors, interest rates, and economic fears can impact gold’s value.
Gold’s recent rise reflects strong safe-haven demand, driven by ongoing market uncertainty. We have seen how geopolitical tensions, such as the US actions in Venezuela and trade friction with India referenced late last year, continue to push investors toward gold. Traders should consider that these factors are likely to keep volatility elevated and support prices in the coming weeks.
Market Dynamics
We are seeing strong bets on Federal Reserve rate cuts in the first half of this year, a significant shift from the policy we saw through most of 2025. This expectation is fueled by slowing manufacturing and employment figures that were reported in the final quarter of last year. Historically, a lower interest rate environment reduces the opportunity cost of holding non-yielding assets like gold.
The US Dollar’s weakness is a major tailwind for gold, and this inverse correlation remains a key trading signal. The US Dollar Index (DXY) has struggled to hold gains, reflecting the market’s pricing-in of looser monetary policy. As long as the dollar remains under pressure, it provides a solid floor for gold prices.
We should not ignore the persistent buying from central banks, which has created a structural bid under the market. Looking back, we saw this trend continue strongly through 2025, with central bank net purchases reportedly exceeding 1,000 tonnes for the third consecutive year. This long-term institutional demand reduces the likelihood of a major price collapse.
For derivatives traders, this suggests that buying call options or establishing bullish call spreads on gold futures could be a prudent strategy to capture further upside. Implied volatility may rise ahead of key central bank meetings, presenting opportunities for those selling puts on significant price dips. The strong underlying trend suggests that looking for entry points on minor corrections is preferable to shorting the market.
