Gold prices in the United Arab Emirates rose on Wednesday, according to FXStreet. The price per gram increased to 574.53 AED, up from 561.64 AED on Tuesday. The price for a tola reached 6,701.27 AED, compared to 6,550.89 AED the day before. FXStreet adjusts international prices to AED, providing updates daily based on market rates.

Gold As A Safe Haven Asset

Gold is a favored investment because it has historically preserved value and is seen as a safe haven in uncertain times. It acts as a shield against inflation and currency decline, offering stability when other investments struggle. Central banks are the biggest holders of gold. In 2022, they bought 1,136 tonnes, worth about $70 billion, which was the largest annual purchase ever. Countries like China, India, and Turkey are actively increasing their reserves. Gold prices are affected by many factors, including geopolitical tensions, fears of recession, and the strength of the US Dollar. Since gold doesn’t yield interest, it performs better when interest rates are low. A strong dollar can lower gold prices, while a weak dollar can push them higher. This week, gold prices have shown an upward trend, reflecting changes in international markets. This temporary strength hints that factors are beginning to support precious metals. For derivative traders, this may indicate the beginning of an upward trend, making call options or long futures contracts appealing. This price movement responds to the changing outlook on U.S. interest rates following the aggressive rate hikes that concluded in 2025. The CME FedWatch Tool now shows a greater than 70% chance of a Federal Reserve rate cut before this quarter ends. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive.

US Dollar And Gold Prices

As a result, the US Dollar Index (DXY) has weakened, recently trading below 101 after staying higher for most of last year. A weaker dollar typically means gold is cheaper for investors using other currencies. This trend gives an additional boost to gold prices in the coming weeks. We should also consider the ongoing strong demand from central banks, which has been steady for several years. The World Gold Council reported that in 2025, global central banks added 1,037 tonnes to their reserves, marking the second-highest year after 2022. This consistent buying helps establish a price floor and absorbs market supply. Ongoing geopolitical tensions also support gold’s role as a safe-haven asset. Unexpected conflicts could lead to a quick shift to safe investments, significantly benefiting gold prices. This makes maintaining long gold positions, whether directly or through options, a smart move against volatility in riskier assets like stocks. Create your live VT Markets account and start trading now.

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