Gold prices in the United Arab Emirates dropped on Friday, according to FXStreet data. The price per gram fell to 614.43 AED from 636.97 AED. Meanwhile, the price per tola decreased to 7,166.58 AED, down from 7,429.44 AED the day before. Gold prices in the UAE are usually based on international rates adjusted for local currency and measurement units. These figures are for reference, as actual local prices may vary slightly.

Gold as a Safe Investment

Gold has long been seen as a reliable investment, particularly in uncertain times. It acts as a buffer against inflation. Its price depends on many factors, including geopolitical risks, interest rates, and how well the US Dollar performs. Central banks, especially in emerging markets, are major buyers of gold and add significant quantities to their reserves. Typically, gold’s price moves opposite to the US Dollar and other risky assets; it tends to rise when the Dollar weakens or when riskier investments decline. The recent decline in gold prices relates directly to the strong US dollar. A firm dollar makes gold more expensive for holders of other currencies, which lowers demand. This trend indicates that the dollar’s movement will be crucial for gold prices in the near future. Recent economic reports from the US are boosting the dollar and putting pressure on gold. For example, the latest Non-Farm Payrolls report, released in January 2026, showed the US economy added an unexpected 315,000 jobs, far more than analysts predicted at 180,000. This strong data has raised expectations that the Federal Reserve will keep interest rates high.

The Impact of US Monetary Policy

Gold, which doesn’t earn interest, struggles when rates are high. The Fed’s recent statements have dashed hopes for a rate cut in the first half of this year, a contrast to the optimism from late last year. As a result, investors are favoring assets that yield returns, like US Treasuries, which puts more downward pressure on gold. Looking back at 2025, we saw central bank purchases help to stabilize gold prices, particularly during geopolitical tensions in the third quarter. However, the World Gold Council’s report for the fourth quarter of 2025 showed a slowdown in these official purchases, weakening a crucial support for gold prices that had been present for most of the past two years. For those trading derivatives, this situation suggests a bearish outlook for gold in the coming weeks. Buying put options on gold futures or major gold ETFs could be a way to profit from further declines while managing risk. This strategy takes advantage of the clear downward trend driven by expectations around US monetary policy. Even with sell-offs in other risk assets like tech stocks and cryptocurrencies, gold is not currently acting as a safe haven. The strong US dollar is the main force in the market, overshadowing typical concerns that would drive investors to gold. Thus, as long as US economic data remains positive, gold is likely to stay under pressure. Create your live VT Markets account and start trading now.

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