Gold prices rose in the United Arab Emirates on Tuesday. A gram of gold is now priced at 529.07 AED, up from 524.10 AED on Monday. The cost per tola also increased, reaching 6,170.97 AED, up from 6,112.97 AED the day before. FXStreet adjusts international gold prices to local currency daily, but local rates may vary slightly.

Gold As A Stable Investment

Gold has always been a safe investment, especially during uncertain times. It helps protect against inflation and currency declines because it isn’t tied to specific issuers or governments. Central banks are the biggest buyers of gold, holding large reserves to support their currencies during economic problems. In 2022, they added 1,136 tonnes of gold, valued at about $70 billion, making it the highest annual purchase ever recorded. Gold prices usually move in the opposite direction of the US Dollar and US Treasuries. When the Dollar weakens, gold tends to become more expensive, providing a safe option during market turmoil. Gold prices can change due to geopolitical issues, economic fears, and interest rate adjustments. A weaker Dollar usually leads to higher gold prices, while a stronger Dollar tends to keep prices stable.

Market Influence On Gold Prices

Today’s rise in gold prices reflects changing expectations about future interest rates. The market expects that central banks, especially the U.S. Federal Reserve, will start lowering rates around mid-2026 to support a slowing economy. Since gold doesn’t yield interest, lower rates make it more appealing to own. This expectation is putting pressure on the US Dollar, which moves inversely to gold. The US Dollar Index (DXY) recently fell below 102, reaching multi-month lows as traders predict a more lenient monetary policy next year. A weaker Dollar is likely to boost gold prices in the weeks ahead. Looking back, the Federal Reserve kept rates steady for most of 2025 to fight ongoing inflation. However, with recent US PMI data dropping below 50 for the second month in a row, recession worries are increasing. The CME FedWatch tool now suggests a 65% chance of a rate cut by June 2026, a significant shift from just a few months ago. In addition to monetary policy, strong demand from central banks provides a solid foundation for gold prices. Central banks have aggressively purchased gold through 2025. World Gold Council data for Q3 2025 reveals net purchases surpassed 300 tonnes for the fourth consecutive quarter. This steady buying from major players like China and India indicates a long-term commitment to gold. For derivative traders, the quiet holiday season may lead to sharp price movements on low volume. The combination of recession fears and anticipated rate cuts creates a favorable setup for gold, making long positions in gold futures attractive. This environment is also ideal for options strategies, as buying call options could provide upside potential with defined risk. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now