Gold prices break records in Dubai: What is the reason for the rise and should you buy gold in 2026?

The Dubai gold market produced a big surprise in 2025, with one of the most dramatic rallies in recent history. What started as a modest year for bullion turned into a spectacular performance, with the price of 24-carat gold rising by more than Dh200 per gram and massive gains for investors, collectors and ordinary residents.

Significant rise in gold in 2025

According to market data, the price of 24K gold started at Dh318 per gram on January 1, 2025, and ended at Dh520 per gram on December 31, an increase of about 63.5 per cent. This means that anyone who has held physical gold for a year has seen the value of their holdings increase by more than Dh200 per gram. The 22-carat variant also saw notable gains, climbing from around Dh294.50 to Dh481.50 per gram, an increase of around Dh187, while 21K gold also rose to around Dh176.75 per gram in the same period. In contrast, the new 14K gold launched in the UAE on November 29 posted a modest gain of 2.3 per cent, reflecting its lighter weight and wider affordability for everyday wear.

Why did you blow the gold?

Several economic forces came together in 2025 to fuel this dramatic boom. Given safe-haven demand, global investors and central banks, including Gulf countries, 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 1970s, with prices rising nearly 70 per cent globally.

Gold jolt in Dubai: 24K prices rise by more than Dh200 per gram in a year. Are you sitting on a fortune?

Interest rate dynamics and the appeal of non-yielding assets, along with expectations of lower interest rates from the US Federal Reserve, helped increase the attractiveness of gold. Low real yields often make gold more attractive than bonds and other financial instruments. The UAE’s Central Bank significantly increased its gold holdings in 2025, with reserves rising by nearly 26 per cent to almost $7.9 billion as global economic uncertainty persists, a historic move that underlined gold’s strategic value. These factors combined to create a strong backdrop for prices, leading to a sharp rise in bullion, while other asset classes recorded uneven returns.

Impact on Dubai and the Gulf region

The boom translated into real-world profits for Dubai residents and investors, who are long accustomed to the Gold Souk’s bustling trade and precious metals culture. Retail buyers saw jewellery and bullion prices rise, increasing the wealth of long-term holders. With 24K gold prices consistently hovering near or above Dh520 per gram in late December and early 2026, the bullion became a focal point for investment as well as decoration. At the same time, short-term volatility such as the year-end decline of close to Dh18 in just one day due to profit-booking in global markets demonstrates how active trading and profit-booking can impact local UAE prices even amid a strong overall rally. Jewellers and bullion dealers in Dubai’s renowned Gold Souk and regional markets have seen increased 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 construction charges and taxes are relatively low, encourages local and international buyers alike.

Global gold context: safe haven, rising demand

Dubai’s gold price story fits into a broader global trend. Precious metals surged across the globe in 2025 as investors fled for safe havens amid geopolitical unrest and economic concerns. Internationally, gold hit a record high of more than $4,300 an ounce, marking one of the metal’s best annual performances in decades.

Gold made Dubai rich in 2025: why prices rose and what it means for 2026

Analysts and major institutions such as Deutsche Bank and Goldman Sachs are forecasting continued strength into 2026 and beyond, with prices ranging from $4,000 to $4,900 an ounce by year-end, supported by continued central bank buying and geopolitical tensions. This global backdrop helped lift sentiment in Dubai and the wider Gulf, where gold is culturally and economically important.

What’s next for gold in 2026?

After a stellar performance in 2025, the market is closely watching how 2026 unfolds. Gold prices remained at high levels in early January 2026, despite modest profit-booking in global markets, early data showed. Forecasts from international analysts suggest the upside potential remains intact if geopolitical risks and safe-haven demand remain strong. For Gulf investors, this means that gold remains a major hedge and a preserver of wealth, not just a jewellery purchase.

The Bottom Line: A Golden Year That Redefined Markets

Dubai’s gold surge in 2025 marked a rare standout year for the precious metals, with 24 carats climbing more than 60 per cent. From record price gains to increased global demand and strong central bank involvement, gold’s rally reflected macroeconomic and geopolitical forces. 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 a changing financial landscape.