Gold prices in Dubai maintained relative stability on Friday, showing a slight decrease of only Dh2 over the past month. This development brought some relief to buyers despite ongoing geopolitical uncertainty.
Gold prices in Dubai maintained relative stability on Friday, showing a slight decrease of only Dh2 over the past month. This development brought some relief to buyers despite ongoing geopolitical uncertainty.
24-karat gold traded at Dh491.75 per gram at the market opening on Friday, which is lower than the Dh495.50 recorded at the close of markets on Thursday. Other varieties, such as 22K, 21K, 18K, and 14K, were priced at Dh455.50, Dh436.75, Dh374.25, and Dh292, respectively.
Globally, spot gold fell by 0.51 percent, reaching $4,080 an ounce according to UAE time at 9:15 AM, while silver decreased by 0.29 percent to $58.64 an ounce.
According to the World Gold Council's report for the second quarter, global demand for gold remained resilient despite falling prices. Total demand, including over-the-counter (OTC) investments, remained unchanged year-on-year at 1,269 tonnes. Demand for the first half of the year increased by 2 percent to 2,522 tonnes, valued at a record $380 billion.
Senior market analyst at the World Gold Council, Luisa Strait, suggested that growth in the second half of 2026 will likely be driven by investment, although the demand structure may change. She noted that OTC activity and demand from Asian investors are expected to play an increasingly significant role, while interest in Western gold ETFs may be closely tied to real yields, US monetary policy expectations, and the dollar exchange rate.
The report noted a sharp recovery in central bank purchases, which reached 289 tonnes in the second quarter after a weak start to the year. Investment in bars and coins remained generally stable. However, positions in gold ETFs came under pressure as investors reacted to weakening prices, rising interest rate expectations, and the strengthening US dollar. Jewelry demand fell to its lowest quarterly level since the pandemic because high prices continued to affect affordability, although the volume of gold jewelry sales increased as consumers continued to purchase lighter pieces.
According to data from the World Gold Council, demand for gold jewelry is likely to remain under pressure throughout the second half of this year. Meanwhile, geopolitical uncertainty, inflation concerns, and limited alternative investment options will continue to support demand for bullion and coins.
The report on gold demand trends for the second quarter of 2026 noted that the volume of demand for jewelry reached its lowest quarterly figure since the pandemic—278 tonnes. This was due to high gold prices and general inflationary pressure, which restricted purchasing power. Nevertheless, spending on gold jewelry grew by 14% year-on-year, reaching $40 billion.
In Middle Eastern countries, jewelry demand remained weak in the second quarter due to high prices affecting affordability. Despite regional geopolitical turmoil, some growth was ensured by prices that were lower than previous peaks. Saudi Arabia showed itself to be one of the strongest participants in the region, demonstrating an 8% year-on-year decrease. In the UAE, the market recorded its fourteenth consecutive quarterly year-on-year decline, becoming one of the few markets where a drop in demand in US dollars was observed.
Market activity in the UAE was pressured by a decrease in tourist flow, as the country's economy is heavily dependent on tourists in the jewelry sector, and the conflict between the US and Iran negatively impacted activity. The market received some support due to lower prices and demand from Indian expatriates, which is likely to increase in the remainder of the year due to increased Indian import duties, giving the region a price advantage.
While jewelry demand remained weak, investment demand in the region proved more resilient. The World Gold Council noted that geopolitical instability continues to stimulate the purchase of safe-haven assets, and the correction in gold prices in the second half of the quarter contributed to the search for favorable deals. Investments in bullion and coins in the UAE increased by 30% year-on-year in the second quarter. This growth was driven by both demand for safe assets and higher Indian import duties, making the purchase of gold in the UAE relatively more attractive.
Across the Middle East, investment demand remained steady despite some slowdown compared to the exceptionally high figures at the beginning of the year. Globally, total gold demand, including over-the-counter (OTC) investments, remained unchanged year-on-year at 1269 tonnes in the second quarter. Thus, demand for the first half totaled 2522 tonnes, which is 2% more than the previous year. However, the value of this demand reached a record $380 billion due to rising prices.
Gold prices in Dubai showed a decline on Thursday, following the UAE Central Bank's decision to keep its key interest rate unchanged. This decision came after a similar move by the US Federal Reserve, which opted to maintain rates at their previous level.
At the opening of trading on Thursday, 24-karat gold in Dubai traded at AED 487.50 per gram, lower than the AED 491.50 recorded at the close of markets on Wednesday. Other purity options—22K, 21K, 18K, and 14K—cost AED 441.50, AED 432.75, AED 371, and AED 289.25, respectively.
Globally, the price of gold futures rose slightly by 0.12 percent, reaching $4044.99 per ounce, while silver dropped by 1.07 percent to $57.19 per ounce.
The UAE Central Bank kept its base rate at 3.65 percent on Wednesday, which fully aligns with the US Federal Reserve's decision to keep the target range for federal funds within 3.5%–3.75%. The UAE typically follows US monetary policy because the dirham is pegged to the dollar.
Despite the Fed not changing interest rates, regulatory representatives maintained a cautious tone, noting that inflation risks remain despite the recent slowdown in growth.
Nick Spencer-Skin, Senior Executive Director at Lunaro Markets Limited, noted that June economic data confirmed the Federal Reserve's decision to leave rates unchanged. He explained that core inflation decreased to 2.6% year-on-year, and the number of hired workers was only 57,000 against a forecast of 114,000. However, he added that the possibility of rate hikes remains due to the June 'dot plot,' where half of the Committee still anticipated at least one hike this year, as well as due to the sharp rise in oil prices during the escalation of hostilities, which casts doubt on inflation improvement.
Vijay Valecha, Chief Investment Officer at Century Financial, agreed that the Fed's decision to maintain rates was consistent with the latest economic data. He emphasized that the June inflation figures were weaker than expected, and the labor market does not show signs of overheating, supporting the arguments for maintaining the current rate level. Valecha added that the current economic indicators are more favorable than those presented to the Fed in June, and it would be unusual for the Fed to react to such data by raising rates at the July meeting, especially since it refrained from doing so in June.
