Gold prices in the UAE have seen unprecedented fluctuations, with the precious metal reaching record highs in 2025. As of April 22, 2025, gold was trading in Dubai at an astonishing $3,500.10 per ounce, marking a year-to-date gain of 33.36 percent since the beginning of the year. This surge follows a robust 27 percent increase in 2024, reflecting heightened safe-haven demand amid escalating trade tensions and economic uncertainty. Vijay Valecha, chief Investment officer at Century Financial, highlighted to Economy Middle East that U.S. tariffs announced by President Trump have contributed to rising inflation expectations while dampening growth projections, fostering a risk-off sentiment among investors.
Despite a decline in gold jewellery demand by approximately 13 percent in the UAE—outpacing the global decline of 11 percent —interest in investment-grade bullion remains strong. Retail prices for 24K gold have hovered around AED400, influenced by upcoming cultural festivals and economic volatility. Retailers in the Gold Souks caution buyers about the rapid changes in gold prices, emphasizing the potential for significant gains for those who invested early this year.
Impact of cultural festivals on gold demand
The UAE, often referred to as the “City of Gold,” experiences seasonal spikes in gold demand, particularly during festivals like Eid Al Fitr and the upcoming Akshaya Trithiya. Valecha notes that these occasions typically drive significant gold purchases, especially among the large expatriate Indian community. However, with gold prices at record highs, many buyers are waiting for price corrections before making purchases.
Recent price movements have shown volatility, with 22K Dubai gold fluctuating between AED388.75 and AED371. Retailers are responding by offering pre-booking options, allowing customers to lock in prices in anticipation of continued price rallies.
Strategies for shoppers in a volatile market
Valecha advises shoppers to closely monitor market trends and consider locking in gold prices ahead of major buying periods, particularly during auspicious festivals. Given the current bull run, potential buyers may benefit from negotiating price-lock offers with reputable retailers. A balanced approach, combining advance bookings and spot purchases, can help mitigate the risks associated with price fluctuations.
Understanding price corrections vs. crashes
Valecha distinguishes between a price correction and a crash, particularly in the context of gold’s recent price movements. A correction, typically defined as a decline of 5 percent to 10 percent, is often short-lived and can be a healthy part of market dynamics. Conversely, a crash involves a more significant drop of 20 percent or more, usually driven by fear or structural shifts in the market. Recent fluctuations saw gold dip to around $3,260 before rebounding, illustrating the fine line between correction and more severe declines.
Consumer confidence reflected in new retail openings
The opening of several new jewellery stores in the UAE underscores consumer confidence in gold as both a cultural asset and a reliable investment. Dubai’s status as a leading gold jewellery market is bolstered by its attractiveness to expatriates seeking high-quality gold at competitive prices. The expansion of retail outlets and increased trade volumes reflect a growing trust in gold amid an uncertain global macroeconomic environment.
Lale Akoner, Global Markets analyst at eToro, remarked to Economy Middle East that the recent depreciation of the U.S. dollar is influencing investor strategies, particularly in the commodities market. With 77 percent of UAE retail investors now allocating funds to gold, the weakening dollar presents both risks and opportunities, prompting a reassessment of portfolio strategies. Akoner notes that gold’s role as a hedge against inflation and geopolitical uncertainty reinforces its appeal in the current climate.
