On Wednesday, gold prices in the United Arab Emirates climbed, according to FXStreet. The price per gram rose to 546.65 AED, up from Tuesday’s 541.50 AED. The cost per tola also increased to 6,376.00 AED, from 6,315.92 AED the day before. FXStreet calculates gold prices by converting international market rates into local currency. These prices are updated daily and may vary slightly from local rates.

Value of Gold

Gold is a valuable asset because it has historically served as a store of value and a safeguard against economic instability, inflation, and currency decline. Central banks hold the most gold, using it to support their economies during tough times. In 2022, central banks made record purchases of 1,136 tonnes, worth about $70 billion. Gold’s price often moves opposite to the US Dollar and other safe assets. It tends to rise when the Dollar falls and during stock market declines. Influences like geopolitical instability and interest rates also affect gold prices; a weaker Dollar generally leads to higher gold prices. Gold is gaining strength, continuing momentum from late last year. Major central banks, after a long period of high rates that slowed the global economy in 2025, are now hinting at changes in policy. The market expects at least two interest rate cuts from the U.S. Federal Reserve before the year ends, which benefits non-yielding assets like gold.

Factors Affecting Gold Prices

This anticipated shift in interest rates is putting pressure on the US Dollar. The Dollar Index (DXY) has already dropped over 3% from its peak last quarter, and we expect more weakness as rate cuts become likely. A weaker dollar usually causes gold prices to rise, making this relationship important for call option strategies in the coming weeks. We also need to consider the ongoing demand from central banks, which has created strong support for gold prices. Following record purchases in 2022 and 2023, data shows that global central banks added an estimated 950 tonnes to their reserves in 2025. Emerging economies are leading this trend to reduce their dependence on the dollar, creating structural support and limiting risks. Fears of recession from the economic tightening over the last two years are driving investors toward gold. With the S&P 500 struggling to find its path after a volatile 2025 and ongoing trade tensions between major economies, investors are playing it safe. This uncertainty makes long positions in gold derivatives an attractive way to hedge against potential downturns in the equity market in the coming months. Create your live VT Markets account and start trading now.

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