Gold prices in the United Arab Emirates remained relatively stable on Friday, with the price per gram standing at 311.04 United Arab Emirates Dirhams (AED). This was only a slight decrease from the previous day’s price of AED 311.09. Similarly, the price per tola remained constant at AED 3,627.96 compared to AED 3,628.50 the day before. The prices are updated daily based on the market rates taken at the time of publication, with slight variations in local rates.
Gold has always held a significant role in human history as a store of value and medium of exchange. Beyond its traditional use in jewelry, it is now considered a safe-haven asset, making it a popular investment during times of economic uncertainty. It is also viewed as a hedge against inflation and depreciating currencies, as it is not reliant on any specific issuer or government. Central banks are the largest holders of Gold, purchasing large quantities to enhance the strength of their currency reserves during turbulent times.
In 2022, central banks globally added 1,136 tonnes of Gold to their reserves, valued at around $70 billion. This surge in Gold purchases marks a record high since data collection began, showcasing the growing importance of Gold holdings among central banks. Emerging economies like China, India, and Turkey are rapidly increasing their Gold reserves as a means of strengthening their economic stability and currency solvency. Gold holdings act as a pillar of trust for a country’s financial reliability in the global market.
Gold’s price movement is often influenced by various factors, including its inverse correlation with the US Dollar and US Treasuries. When the Dollar weakens, Gold typically rises, attracting investors and central banks looking to diversify their assets during turbulent economic conditions. Additionally, Gold prices tend to be negatively impacted by a strong Dollar, while a weaker Dollar generally leads to an increase in Gold prices. Geopolitical instability and concerns of a recession can also cause rapid escalations in Gold prices due to its perceived safe-haven status.
As an asset priced in dollars (XAU/USD), Gold’s movement is heavily dependent on how the US Dollar performs in the market. A stronger Dollar can keep Gold prices in check, while a weaker Dollar tends to drive up Gold prices. Furthermore, as a yield-less asset, Gold tends to rise when interest rates are low, whereas higher interest rates often have a negative impact on Gold prices. Ultimately, Gold’s value is determined by a complex interplay of numerous factors, making it both a valuable asset and a strategic investment choice for individuals and central banks alike.
