Gold prices in the United Arab Emirates rose on Wednesday, climbing to 456.15 AED per gram from 455.62 AED the day before. The tola price also increased to 5,320.47 AED, up from 5,314.25 AED. Since the beginning of 2025, Gold has surged by 45%, with an 11% rise just in September.

Market Uncertainty and Gold’s Allure

Uncertainty in the markets is pushing investors toward safe-haven assets like Gold. Factors include political events such as the potential US government shutdown and possible changes in Federal Reserve policy. Traders currently see a 95% chance of an interest rate cut in October and a 75% chance in December. August reports showed US job openings at 7.22 million, which was higher than expected. Geopolitical tensions, like Russia’s response to US missile support for Ukraine, also influence Gold prices. These risks make Gold an attractive safe-haven asset. FXStreet adjusts international prices for the UAE market. Gold acts as a shield against inflation and currency declines, independent of any issuer. Central banks, which hold large amounts of Gold, tend to increase their reserves during economic uncertainty. In 2022, they set a record by adding 1,136 tonnes to their holdings. Gold prices are influenced by the US Dollar’s strength, geopolitical unrest, and interest rates, typically rising when rates are low or the Dollar is weak. Gold is gaining momentum, having risen over 11% in September alone. Our immediate concern is the potential US government shutdown after the Senate failed to pass a spending bill. Historically, shutdowns like the 2018-2019 event created economic uncertainty, which often boosts safe-haven assets.

Interest Rates and Economic Impacts

This political deadlock strengthens expectations that the US Federal Reserve will ease monetary policy to help the economy. The market is now anticipating a 95% chance of a rate cut at the October FOMC meeting, as indicated by the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding Gold, making it more appealing as an investment. Despite recent tough comments from Fed officials and job openings data showing 7.22 million in August, the market’s belief in rate cuts remains solid. This indicates traders are focusing on the bigger economic picture rather than minor data fluctuations. Therefore, temporary dips in Gold prices due to strong economic data could present short-lived buying opportunities. In addition to domestic US issues, geopolitical tensions are providing solid support for Gold prices. The possibility of escalating conflicts, highlighted by advanced US missile support discussions for Ukraine, keeps risk sentiment unstable. This environment should drive more investments into Gold, bolstering its value. We’re also observing steady demand from central banks, which adds long-term support for Gold prices. In 2022, central banks set a record for Gold purchases and continued to buy over 1,000 tonnes in 2023. This suggests a global trend moving away from reliance on the US Dollar, which is positive for Gold. Considering these factors, we expect increased market volatility, which is favorable for options strategies. Long call options or call spreads may be effective ways to gain exposure to potential upside while managing risk. We should be ready for strong price reactions to news about the shutdown and any announcements from the Federal Reserve. Create your live VT Markets account and start trading now.

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