Gold prices in the United Arab Emirates rose on Tuesday, according to FXStreet data. The price per gram increased from AED 596.91 on Monday to AED 598.15. Prices per tola also went up, moving from AED 6,962.20 to AED 6,976.66. FXStreet calculates these prices by adjusting international prices (USD/AED) to the local currency and measurement units.

Gold As A Safe Asset

Gold has long been valued both as an investment and a means of exchange. It is seen as a safe asset, especially during economic turmoil, and acts as a shield against inflation. Central banks are significant holders of gold, buying 1,136 tonnes worth about $70 billion in 2022. Countries like China, India, and Turkey are quickly increasing their reserves. Gold prices often move in the opposite direction of the US Dollar and US Treasuries. When the Dollar weakens, the price of gold tends to go up. Geopolitical events and interest rates also affect gold prices, usually favoring gold when interest rates are lower. Since gold is priced in dollars (XAU/USD), its price is closely tied to the US Dollar. A strong Dollar keeps gold prices stable, while a weak Dollar usually causes gold prices to rise. Recently, gold has been rising steadily, with prices testing the $2,150 per ounce mark. This trend shows gold’s classic role as a safe-haven asset during uncertain market conditions, something we saw frequently in the turbulent markets of 2024 and 2025.

Impact Of US Interest Rates And Geopolitical Tensions On Gold

The latest US CPI data came in a bit lower than expected at 2.8%, raising hopes that the Federal Reserve will keep rates steady during its March meeting. This is a shift from the aggressive rate hikes we saw in 2022 and 2023, which had previously put pressure on gold prices. Gold, being a yield-less asset, generally does well when interest rate expectations stabilize or decline. Geopolitical tensions are also supporting gold prices. Ongoing maritime trade disruptions in the Red Sea are causing new concerns about supply chains. This type of instability often drives investors toward safe assets. We can expect this situation to support gold prices for a while. Additionally, the strong demand from central banks continues. The latest World Gold Council report for Q4 2025 indicated that global central banks added a net 290 tonnes to their gold reserves. This consistent buying helps keep gold prices stable and limits potential declines. In this context, we should consider long-dated call options to capture more upside potential while managing our risk. Implied volatility has risen to about 18%, making bull call spreads a cost-effective choice. Alternatively, selling out-of-the-money puts during price dips can help us collect premium while relying on strong fundamental support. The US Dollar Index (DXY) recently fell below the 102 mark, providing a boost for gold. This inverse relationship is a reliable indicator since a weaker dollar makes gold cheaper for foreign buyers. We need to watch the dollar closely, as any unexpected strength could challenge our positions. Create your live VT Markets account and start trading now.

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