Gold prices in UAE: Is Dh400 per gram the new normal?

Vijay Valecha , May 29, 2025, Khaleej TImes

For UAE residents considering gold for long-term investment or savings, now may be the right time to act.

According to analysts and industry insiders, the precious metal is expected to remain above Dh400 per gram in the medium to long term. This marks a significant shift in market dynamics.

In April, 24-carat gold crossed the Dh400-per-gram threshold for the first time in Dubai. This surge was driven by a mix of global uncertainties, including former US President Donald Trump’s tariff policies, geopolitical tensions, falling interest rates, and strong demand from central banks.

As of Wednesday evening, 24-carat gold was trading at Dh400.25 per gram, while 22-carat gold was priced at Dh370.75. On the global stage, spot gold hovered around $3,306 per ounce, a modest increase of 0.13 per cent.

“Volatility is likely to persist in the short term, primarily influenced by the pace and outcomes of ongoing trade negotiations,” said Vijay Valecha , Chief Investment Officer at Century Financial. “Any major development — be it a breakthrough deal or new tariffs — could trigger sharp market reactions.”

Valecha noted that although short-term fluctuations are expected, gold prices are likely to remain above Dh400 per gram over the long term. “Trump’s unpredictable tariff strategies have contributed to global trade uncertainty, increasing demand for safe-haven assets like gold. Recently, he threatened a 25 per cent tariff on all iPhones manufactured outside the US and a 50 per cent levy on EU goods — though these were temporarily postponed as trade negotiations continue.”

Even if new trade agreements are reached and tariffs are lowered, Valecha believes gold will maintain its appeal due to broader economic concerns. He forecasts that gold could rise to $3,700 by the end of the year and potentially reach $4,000 by mid-2026, up from the current $3,335 per ounce.

“America’s widening trade deficit, the sharp increase in the US debt-to-GDP ratio from 35 per cent in 2007 to an expected 100 per cent by 2025, and the fiscal impact of Trump’s tax cuts have all contributed to a global flight to safety,” he added. “These factors strengthen gold’s position as both a portfolio diversifier and stabiliser.”

Valecha cautioned that while significant trade deals could cause a temporary dip in gold prices, the broader macroeconomic fundamentals support a continued rally.

Aditya Singh, Head of International Jewellery Business at Titan Company, echoed these sentiments. “Although today’s elevated gold prices may seem unusual, they align with historical trends where prices rise during periods of economic uncertainty,” he said.

He advised retail buyers not to panic but to monitor key global indicators such as interest rates, inflation, geopolitical tensions, and central bank reserves. “Small, consistent purchases tend to yield strong returns over time. We encourage customers to view gold as a blend of emotional and financial value — whether for weddings, milestones, or as a store of wealth, informed decision-making is essential.”

Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers, emphasised the enduring value of jewellery as a long-term asset. “While natural price fluctuations will occur, steady demand in culturally rich markets like the UAE reassures us that gold will continue to be a preferred choice,” he said.

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