Gold prices in the United Arab Emirates went up on Friday, according to FXStreet data. The price per gram rose to AED 494.56 from AED 490.84 on Thursday. The price per tola also increased, reaching AED 5,768.23 compared to AED 5,725.05 the day before. FXStreet adjusts international gold prices to the local UAE currency and units, updating these daily based on market rates.

Gold as a Safe Haven Asset

Gold is highly regarded because it has historically been a reliable store of value. It’s often seen as a safe-haven asset, providing protection during inflation or when currencies lose value. Central banks are the largest buyers of gold, purchasing 1,136 tonnes worth about $70 billion in 2022—the highest on record for a single year. This buying helps stabilize economies by diversifying their reserves and supporting currency strength. Gold prices often move in the opposite direction from the US Dollar and US Treasuries, and they typically have a negative relationship with riskier assets like stocks. Key factors that affect gold prices include global political instability and interest rates. A weaker US Dollar usually drives gold prices higher, while a stronger Dollar keeps them steady. As gold shows renewed strength, we need to keep in mind its inverse connection with the US Dollar. The Dollar Index (DXY) has recently weakened, dropping below the 102 level after being strong earlier this year. This makes gold cheaper for those using other currencies, which could increase demand in the coming weeks. We think interest rate expectations are a big driver for gold right now. After significant rate hikes through 2023 and 2024, markets now expect a pause or even cuts from the Federal Reserve by mid-2026. Lower interest rates make holding non-yielding assets like gold more appealing.

Central Bank Impact on Gold Prices

The steady buying by central banks provides a strong support for gold prices. This trend has continued since the record purchase of 1,136 tonnes in 2022, with emerging economies taking the lead. Our analysis shows that central banks have added over 850 tonnes to their reserves in the first three quarters of 2025, indicating ongoing confidence in gold. Given the ongoing global uncertainty, gold’s role as a safe-haven asset remains crucial. Any increase in global conflicts could lead to a rush to safety, driving prices up sharply. Derivative traders might want to use call options to prepare for potential price surges while minimizing downside risk. We are also seeing higher implied volatility in gold options, suggesting that the market is expecting bigger price changes. This environment is good for strategies that benefit from volatility, not just directional bets. Look for chances where option prices seem unfavorable compared to the potential for a big move. Finally, keep an eye on the relationship between gold and equities. The S&P 500 has been mostly flat for the last quarter, and there are concerns about slowing economic growth. If a significant shift out of stocks occurs, we expect some of that money will flow into gold as a defensive measure. Create your live VT Markets account and start trading now.

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