Gold prices increased in the United Arab Emirates on Friday, according to FXStreet. The rate was AED 515.12 per gram, up from AED 511.04, while the price per tola rose to AED 6,008.22 from AED 5,960.70.

Market disturbances, such as US-China trade tensions and the US government shutdown, have bolstered Gold’s run. The possibility of US Federal Reserve interest rate cuts has further pressured the US Dollar, enhancing Gold’s appeal as a safe-haven asset.

Gold Prices In The UAE

Gold prices in the UAE reflect international rates adjusted for local currency and units. As a non-specific government-issued asset, Gold offers a hedge against both inflation and depreciating currencies. It is especially sought after in turbulent times.

Central banks, major Gold holders, seek to diversify reserves to support their economies. In 2022, banks, particularly from emerging economies, added a record 1,136 tonnes. Gold prices often move inversely with the US Dollar and US Treasuries.

Geopolitical instability and economic fears can drive Gold prices up due to its safe-haven nature. Low-interest rates further boost Gold prices, while a stronger US Dollar tends to suppress them.

With gold prices climbing, the combination of global economic risks and expected interest rate cuts from the Federal Reserve creates a favorable environment for bullish positions. We see the current market as a signal to look at strategies that profit from further upward movement in the precious metal. Derivative traders might consider buying call options or establishing bull call spreads to capitalize on this momentum with defined risk.

Federal Reserves Dovish Stance

The Federal Reserve’s dovish stance is a primary driver, with markets now fully pricing in rate cuts for both the upcoming October and December meetings. Recent economic data supports this view, as September’s Non-Farm Payrolls report showed a weaker-than-expected gain of just 85,000 jobs, signaling a cooling labor market. This gives the Fed ample reason to ease monetary policy, which tends to weaken the dollar and boost gold.

Geopolitical tensions are providing a strong tailwind for safe-haven assets. We’ve seen in the past, such as during the initial conflict escalation in 2022, how events in Ukraine can trigger a flight to safety, and the latest Russian attacks are reviving those concerns. The addition of renewed US-China trade friction creates another layer of uncertainty that supports holding gold.

This outlook is putting noticeable pressure on the US Dollar, which has an inverse relationship with gold. The US Dollar Index (DXY) has already fallen below the 103 level in anticipation of the Fed’s easing cycle. For traders, this dollar weakness makes gold cheaper for foreign buyers and reinforces the bullish case for the metal itself.

Underpinning this entire trend is the continued, aggressive buying from central banks. Following the record-breaking purchases we saw in 2022 and 2023, the latest World Gold Council figures for 2025 show global central banks have already added over 800 tonnes to their reserves year-to-date. This consistent demand creates a solid price floor, suggesting that any significant dips are likely to be short-lived.

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