Gold prices in the United Arab Emirates rose on Tuesday. The cost per gram went up to 492.03 AED from 485.33 AED on Monday. The price of gold per tola also increased, reaching 5,738.98 AED from 5,660.78 AED. The US government shutdown, which started on October 1, is now in its third week. It’s waiting for a crucial Senate vote on the funding plan. At the same time, trade tensions between the US and China have worsened due to threats of a 100% tariff on Chinese goods, although this position was later softened.

Geopolitical Influences On Gold

Geopolitical issues, especially the ongoing Russia-Ukraine conflict, are driving up gold prices. Expectations of a possible rate cut by the US Federal Reserve are also boosting gold. The US Dollar remains strong, but this has little effect on the positive outlook for gold. FXStreet adjusts international gold prices for the local UAE market, keeping in mind the small variations in local prices. Central banks, which hold a lot of gold, increased their reserves by 1,136 tonnes in 2022. This highlights that gold is often seen as a safe investment during economic instability and when currencies lose value.

Market Strategies Amid Economic Challenges

Gold is on a strong upward trend due to geopolitical tensions and economic concerns. The ongoing US government shutdown and the worsening situation in Ukraine are pushing investors towards safe assets. This suggests that gold prices are likely to keep rising. The market anticipates a Federal Reserve rate cut at the end of October, with the CME FedWatch Tool indicating a 98% chance of a 25-basis-point reduction. This shift, in response to recent inflation data showing a core CPI below 2%, makes gold more appealing. We believe this will create strong support for prices in the coming weeks. Uncertainty in US-China trade relations, with recent tariff threats followed by milder responses, continues to help gold prices. The intensifying conflict in Ukraine also drives demand for stable assets. These issues are not expected to resolve soon, providing ongoing support for gold. In this environment, we should explore strategies that take advantage of both rising prices and potential volatility. Buying call options on gold futures or related ETFs could effectively capture further gains. We experienced a similar scenario during the prolonged government shutdown in 2018, which led to a multi-month rally in gold. Beyond current events, there is strong physical demand from central banks, creating a solid foundation for prices. The World Gold Council’s latest Q3 2025 report confirmed that central banks added another 250 tonnes to their reserves, indicating a sustained shift away from the US Dollar. This fundamental support suggests that any price drops are likely to be temporary. Create your live VT Markets account and start trading now.

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