Gold prices in the UAE continued their upward trajectory on Tuesday, December 23, following two record-breaking highs in a single day. When markets opened, 24K gold traded at Dh540, a significant increase of more than Dh10 from Monday morning’s Dh529.75. Prices for 22K, 21K, 18K, and 14K gold were recorded at Dh500, Dh479.50, Dh411, and Dh320.50, respectively. Spot gold prices stood at $4,475.44 at 10:30 a.m., up nearly 1 percent from Monday, while silver also surpassed historic highs, reaching $69.43.
According to Vijay Valecha, chief investment officer at Century Financial, the rally marks “one of the strongest” surges for gold since the 1970s. “This is reflective of forces that make gold both a safe haven, and an inflation hedge,” he said. “However, current global dynamics tilt more towards risk aversion, making the safe haven characteristic outshine the inflation hedge one.” Valecha attributed the rally to growing geopolitical tensions, trade disputes, and broader economic uncertainty, which have driven investors to seek refuge in precious metals.
Gold demand in the UAE shows a pattern distinct from most countries, Valecha noted, due to the nation’s role as a global trading hub. While consumers continue to purchase gold, they are exercising caution. Across the Middle East, total jewellery demand reached 33.8 tonnes in the third quarter, with the UAE accounting for roughly one-fifth of regional demand, second only to Saudi Arabia. Developed markets are experiencing similar slowdowns; for instance, U.S. jewellery demand fell to 24.6 tonnes in Q3, marking one of its weakest third quarters on record.
Bar and coin demand in the UAE remained resilient at around 3.4 tonnes in the same period. While slightly lower than the previous year, the decline was far milder than in developed markets, where U.S. bar and coin demand fell by more than 60 percent as investors booked profits. Europe, by contrast, saw renewed buying as investors returned to gold during price dips.
Valecha highlighted that a large portion of gold purchased in Dubai is exported to South Asia, Africa, and neighboring regions, making the UAE more of a global hub than a market reliant on local consumption. “In simple terms, the UAE behaves like a developed market in consumption, but like an emerging-market hub in importance, quietly central, highly liquid, and structurally resilient,” he said.
Analysts said the rally underscores gold’s dual role as both a hedge against inflation and a safe haven in uncertain times, while the UAE’s position as a central trading hub continues to influence regional and global demand. The ongoing surge reflects investor caution amid geopolitical and economic volatility, reinforcing the country’s strategic importance in the global precious metals market.
