Dubai’s gold market delivered a giant surprise in 2025, marking one of the most dramatic rallies in recent history. What started as a modest year for bullion turned into a breakout performance, with the price of 24-carat gold climbing by more than Dh200 per gram and delivering massive gains for investors, collectors and everyday residents alike.

Gold’s remarkable rally in 2025

According to market data, the price of 24K gold opened the year at Dh318 per gram on January 1, 2025 and finished the year at Dh520 per gram on December 31, a jump of roughly 63.5 percent. This means that anyone holding physical gold throughout the year saw the value of their holdings rise by more than Dh200 per gram. The 22-carat variant also saw remarkable gains, climbing from about Dh294.50 to Dh481.50 per gram, roughly a Dh187 increase, while even 21K gold rose around Dh176.75 per gram over the same period. By contrast, the newly introduced 14K gold, launched in the UAE on November 29, posted a more modest 2.3 percent gain, reflecting its lighter weight and broader affordability for everyday wear.

Why gold took off

Several economic forces came together in 2025 to fuel this dramatic upswing. Given the safe-haven demand, global investors and central banks including those in the Gulf, shifted capital into gold as a hedge against market uncertainty and geopolitical risk, a pattern seen throughout 2025. According to reports, gold’s rally in 2025 was the strongest annual performance since the late 1970s, with prices soaring nearly 70 percent globally.

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Interest rate dynamics with expectations of lower US Federal Reserve interest rates and the appeal of non-yielding assets helped lift gold’s allure. Lower real yields often make gold more attractive relative to bonds and other financial instruments. The Central Bank of the UAE increased its gold holdings significantly in 2025, growing reserves by about 26 percent to nearly $7.9 billion as global economic uncertainty persisted, a historic move that underscored gold’s strategic value. These factors combined to create a strong backdrop for prices, pushing bullion sharply higher even as other asset classes posted uneven returns.

Impact on Dubai and the Gulf region

For residents and investors in Dubai, long accustomed to the Gold Souk’s bustling trade and precious-metal culture, the surge translated into real-world gains. Retail buyers saw both jewellery and bullion values climb, lifting the wealth of long-term holders. With 24K gold prices consistently near or above Dh520 per gram in late December and into early 2026, bullion became a focal point for investment as much as adornment. At the same time, short-term volatility such as a near Dh18 drop in just one day toward the end of the year due to profit-booking in global markets, reflected how active trading and profit-taking can influence local UAE prices even amid a strong overall rally. Jewellers and bullion dealers across Dubai’s famous Gold Souk and regional markets noted the heightened interest, particularly from expatriate buyers and Middle Eastern investors seeking to protect wealth in an uncertain macroeconomic environment. The UAE’s competitive pricing environment, where making charges and taxes are relatively low, further incentivises local and international buyers alike.

Global gold context: Safe haven, surging demand

Dubai’s gold price story fits into a broader global trend. Precious metals surged worldwide in 2025 as investors raced toward safe havens amid geopolitical unrest and economic concerns. Gold topped record levels over $4,300 per ounce internationally, one of the metal’s best annual performances in decades.

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Analysts and major institutions such as Deutsche Bank and Goldman Sachs forecast continued strength through 2026 and beyond, with projections ranging from $4,000 to over $4,900 per ounce by year-end, supported by sustained central bank buying and geopolitical tension. This global backdrop helped lift sentiment in Dubai and the broader Gulf, where gold remains culturally and economically significant.

What’s ahead for gold in 2026?

After a spectacular run in 2025, markets are closely watching how 2026 unfolds. Early data suggests that gold prices continued to hold near high levels in early January 2026, even after slight profit-taking in global markets. Forecasts by international analysts suggest continued upside potential if geopolitical risks and safe-haven demand remain strong. For Gulf investors, this means that gold remains a key hedge and wealth preserver, not just a jewellery purchase.

Bottom line: A golden year that redefined markets

Dubai’s gold surge in 2025, with 24K climbing more than 60 percent, marked a rare standout year for precious metals. From record price gains to heightened global demand and strong central bank involvement, gold’s rally reflected broader economic and geopolitical forces at play. As 2026 begins, many investors and analysts see bullion continuing to play a central role as a store of value, especially in a world marked by uncertainty and shifting financial landscapes.

Reuters

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The broader macro backdrop for Indian equities remains stable heading into 2026, supported by healthier corporate balance sheets and early signs of an earnings recovery across sectors, according to ICICI Prudential Alternate Investments. However, after a long market upcycle and widespread rerating, much of the optimism on growth and profits is already reflected in stock valuations, the report cautioned.In its report titled “Outlook 2026: Beyond Narratives”, ICICI Prudential said that while the opportunity set in Indian equities continues to look attractive, market returns are likely to be more moderate going forward.It added that broad, index-led gains may give way to outcomes driven by selective stock picking rather than sweeping macro narratives.“After an extended market cycle and a rerating across many parts of the market, much of this macro and earnings optimism is already reflected in valuations,” the report said, adding that execution and company-specific fundamentals are expected to matter more than themes. “We believe going ahead, execution is likely to trump narratives, and disciplined micro research is likely to outweigh broad macro views,” it noted.Looking at the wider economy, the report said India appears to be in “good shape” as it moves deeper into the 21st century. A favourable demographic profile, with a large working-age population entering the labour force, places India in a stronger position compared with economies grappling with ageing populations.While foreign capital inflows have been lower than historical levels, the report said India’s growth prospects could still attract overseas investors over time. It also pointed out that the government’s fiscal position is on a consolidation path.Corporate financials have strengthened notably, with operating cash flows, profit after tax and investing cash flows growing at compound annual rates of 18 per cent, 15 per cent and 14 per cent respectively between FY19 and FY25, compared with single-digit growth in the earlier period, as per news agency ANI.The report also sees scope for faster economic growth alongside a normalisation in inflation. It added that improvements in geopolitics and trade ties with major partners such as the US, China and Europe could act as catalysts, potentially boosting sentiment and positioning India favourably in emerging global supply chains.