Gold Price Forecast 2025–2026: UAE Market Outlook
Gold hit an all-time high above USD 3,100/oz in March 2025. What comes next? This analysis examines the key drivers behind gold's 2025 rally and forecasts where prices are heading through 2026 — and what it means for Dubai gold buyers.
Gold in 2025: The Rally That Surprised Everyone
Gold began 2025 at approximately USD 2,625/oz and surged past USD 3,100/oz by March — a gain of nearly 20% in under three months. For context, the average gold price in 2023 was USD 1,940/oz; 2024 averaged approximately USD 2,400/oz. The pace of 2025's rally is exceptional by historical standards.
In Dubai, where gold is priced in AED (pegged to USD at 3.6725), this translates directly: 24K gold that cost approximately AED 230/gram in early 2025 now exceeds AED 290/gram.
Key Drivers Behind the 2025 Gold Rally
1. Central Bank Buying
Central banks globally purchased over 1,000 tonnes of gold annually in 2022, 2023, and 2024 — well above the historical average of 400–500 tonnes/year. China's PBoC, India's RBI, Poland, Turkey, and several Gulf central banks have been consistent buyers. The UAE Central Bank itself increased gold reserves to 12.9 tonnes as of early 2025. This institutional demand has created a structural floor under gold prices.
2. US-China Trade War and Tariff Uncertainty
US tariffs imposed in early 2025 on Chinese, Canadian, and Mexican imports triggered significant financial market volatility. Investors seeking safe-haven assets poured money into gold. Every escalation in the tariff war has historically been followed by a gold price spike within days.
3. US Dollar Weakness
Gold and the US dollar typically move inversely. As US fiscal deficits continued to expand and market confidence in USD reserve status modestly softened, gold benefited. The DXY (Dollar Index) fell from 108 in January 2025 to below 104 by March 2025 — a 4% dollar weakening that amplified gold's rise.
4. Middle East Geopolitical Risk Premium
Ongoing tensions in the Middle East and Eastern Europe continued to support gold's safe-haven premium in 2025.
Gold Price Forecasts for 2025 (Major Banks)
| Institution | 2025 Target | 2026 Target |
|---|---|---|
| Goldman Sachs | USD 3,300/oz | USD 3,700/oz |
| JPMorgan | USD 3,200/oz | USD 3,500/oz |
| UBS | USD 3,000/oz | USD 3,200/oz |
| Citi | USD 3,000–3,500/oz | USD 3,200+/oz |
| Bank of America | USD 3,500/oz | N/A |
Forecasts as of Q1 2025. Subject to revision.
What Could Push Prices Higher
- US Federal Reserve rate cuts (reduces opportunity cost of holding gold)
- Further USD weakness or US fiscal deterioration
- Additional central bank purchases, especially from BRICs nations
- Escalation in US-China tariff war or new geopolitical flashpoints
- Retail gold ETF inflows resuming in Western markets (largely absent in 2024)
What Could Push Prices Lower
- A strong resolution to US tariff uncertainty reducing risk-off sentiment
- USD strengthening significantly (e.g., if US inflation resurges)
- Gold selling by hedge funds that have accumulated very large speculative positions
- A sharp rally in equities drawing investors away from safe-haven assets
What Does This Mean for Dubai Gold Buyers?
With the consensus forecast pointing toward USD 3,200–3,700/oz by end-2025 and potentially USD 3,500–4,000/oz by end-2026, buyers face a dilemma:
- If you need gold for jewellery (wedding, gifts): Buy when you need it — timing the market consistently is nearly impossible, and the price difference over a 2–3 month period is usually modest.
- If buying for investment: Dollar-cost averaging (buying a fixed AED amount monthly regardless of price) removes the anxiety of trying to time the peak and trough.
- If you already own gold: Forecasts suggest holding is rational. The structural drivers (central bank demand, geopolitics, dollar dynamics) are unlikely to reverse quickly.
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