Global financial markets are expected to face heightened volatility in 2026 amid persistent geopolitical tensions, with bonds and gold emerging as key defensive assets for investors, according to Maurice Gravier, chief investment officer at Emirates NBD Wealth Management.
Speaking on Monday during the launch of the bank’s Annual Global Investment Outlook for 2026, Gravier said investors should brace for continued uncertainty across asset classes and focus on diversification to navigate the year ahead.
“Bonds will be the safest bet. Gold is the insurance you need to have, because it’s a dangerous world and it’s a currency you cannot print,” Gravier said. He added that emerging markets offer attractive opportunities through both equities and fixed income due to relatively low valuations and stronger growth prospects compared to developed economies.
Gold has remained a focal point for investors seeking protection against risk. Prices surged to a record high of $5,500 per ounce last month before retreating sharply as investors locked in profits. On Monday, gold was trading near $4,600 per ounce, about $900 below its recent peak.
Gravier cautioned that returns in 2026 are likely to fall short of the strong gains recorded last year. “It’s going to be a very volatile year, as volatile as last year, with less upside potential, less performance,” he said. He noted that portfolios delivered returns of between 14 and 20 per cent in 2025, a level he believes will be unattainable this year. Instead, he forecast gains in the range of five to 10 per cent.
Within emerging markets, Gravier highlighted bonds from the Gulf Cooperation Council as a preferred option, describing them as the “blue chip within emerging markets.” He said the combination of higher yields and relative stability makes emerging market assets appealing at a time when developed markets face policy and valuation challenges.
According to Emirates NBD, global markets will continue to be influenced by ongoing tensions between the United States and Iran, the prolonged Russia-Ukraine conflict, and trade disputes involving major economies.
In its report titled Eyes Wide Open, the bank said uncertainty surrounding fiscal, monetary and trade policies will weigh on the global economic outlook. “We start 2026 with a number of unknowns, especially on the policy side,” the report said, adding that while the resilience shown in 2025 was encouraging, overall visibility remains limited.
The Dubai-based lender expects the US Federal Reserve to continue easing monetary policy in 2026, forecasting a total of 75 basis points in interest rate cuts. It said the central bank faces internal divisions as inflation remains above its two per cent target, despite easing from earlier highs.
Emirates NBD also anticipates a slowdown in global trade growth and increasing fiscal strain across G20 economies, factors that are likely to shape market sentiment throughout the year.
