The beginning of this year has witnessed significant fluctuations in gold prices. In January, the yellow metal experienced a rapid and robust rise, with the price of an ounce surging almost daily from around $4,220 at the start of the month to over $5,500 by its end. This surge reflects strong investment demand alongside growing global economic and geopolitical concerns. However, this meteoric rise soon gave way to swift profit-taking, resulting in a price drop to nearly $5,100 after 50 days into the year, amounting to an $880 gain since the start of the year.
Despite the upward trend, gold prices experienced sharp volatility, encountering sudden drops during various trading sessions as profit-taking increased and short-term investor sentiments shifted. Daily fluctuations contributed to both unprecedented highs and lows in prices.
This report highlights those significant price movements and their implications, gathering insights from several gold market experts.
Gradual Buying Strategy
According to Tawhid Abdullah, Chairman of the Dubai Gold and Jewelry Group, gold prices have seen remarkable increases since the beginning of January, climbing from $4,216 to over $5,500 in just 28 days, yielding nearly a 29% gain. This performance is a continuation of a rapid upward trend compared to previous years, as the price increased from $2,612 to $4,316 at the start of 2025, having been at $2,065 in 2024, signaling a clear shift in market direction and robust momentum for gold.
Despite the market volatility and rapid price movements, global market estimates suggest that prices could reach $6,000. However, Abdullah notes that such a scenario requires caution since rushing into purchases may expose investors to short-term price fluctuations. Therefore, a gradual buying strategy is recommended for a more balanced approach compared to investing all available capital at once.
In this context, if an individual has entered the gold market for investment purposes and has realized substantial gains, it would be prudent to liquidate a portion of their investment to lock in profits while maintaining the flexibility to re-enter the market at more favorable price levels. Maintaining a full position without realizing any profits due to greed or the desire to buy at higher prices is not a sound approach, as it may lead to the loss of profits during any potential price corrections.
Consumer behavior indicators show a noticeable increase in confidence compared to previous periods, along with a growing inclination toward acquiring gold and silver bullion. This trend has not been witnessed in such clarity since 1979 and 1980. This shift reflects a cautious anticipation and division in investment decisions, with some consumers preferring to hold onto savings in preparation for potential developments, while others are opting to buy despite relatively high prices, attempting to capitalize on the current momentum.
However, caution remains essential, especially as some individuals have resorted to borrowing to purchase gold and silver, which could amplify financial risks in the event of any market corrections or sudden fluctuations as seen previously, necessitating more informed and disciplined investment decisions based on risk management rather than emotion or greed.
Correction Factors
Dr. Angie Alfahham, an economic expert specializing in precious metals, stated that the price movements of gold since the beginning of this year clearly demonstrate a continuous upward trajectory, with the yellow metal surpassing $5,500 per ounce, marking an unprecedented historical rise. She noted that the rapid increases observed within just one month represent an exceptional occurrence not seen in global markets before. Conversely, the sudden drop in prices at the end of January is deemed natural and expected, as gold inherently rises and falls but retains its status as a safe haven away from daily speculation.
She added that gold began 2026 by achieving record highs, allowing it to exceed last year’s levels by approximately 29% within just one month, a historic precedence reflecting strong investment momentum and increasing global interest in the yellow metal.
In a broader market analysis, Dr. Angie emphasized that the fluctuations in gold prices strongly indicate a fundamental shift in global market behaviors. She highlighted that the factors supporting this upward trend are still present, including heightened geopolitical tensions, ongoing global economic instability, and movements toward lowering interest rates, driving investors to withdraw funds from stock and bond markets to invest in gold as a safe haven.
Despite this upward momentum, she clarified that potential price correction scenarios remain valid. However, the nature of these corrections has changed compared to previous years, becoming limited and swift, often not exceeding a few hours or days without affecting the overall upward trend, reflecting strong demand and sustained confidence in gold as a long-term investment asset.
Regarding future predictions, financial institutions anticipate that gold prices could range between $6,000 and $7,500 per ounce in the upcoming period. Although accurately timing any potential correction is challenging, she confirmed that any decline would not revert prices to the previously seen levels due to the stark differences in the current economic environment, alongside continued purchases by central banks and growing bets on lower U.S. interest rates, while also anticipating periods of volatility or limited price corrections following steep upward movements.
Dr. Angie pointed out that the primary correction factors might include a stronger dollar, a decrease in geopolitical tensions, or a slowdown in central bank purchases. She affirmed that if these conditions materialized, their impact would likely be temporary and limited, without altering the overall price trend. The positive outlook for gold in the medium to long term remains in place, underpinned by global economic uncertainty and strong demand from central banks.
Additionally, she noted that demand for gold continues unabated even at high price levels, with new buyers entering the market with each temporary dip, compensating for sold quantities. This trend illustrates a growing confidence in gold as a means of saving and investment. This shift in purchasing patterns has led consumers to reduce gold jewelry purchases while simultaneously increasing interest in higher-purity bullion and coins, particularly at 999.9 purity, marking a clear rise in investment awareness in the UAE and neighboring countries, with gold increasingly viewed as a hedge against inflation and a means of preserving value rather than merely a decorative item.
A Trusted Ally in Times of Crisis
Economic expert Abdulwahid Ahmed Al-Marzouqi asserts that the recent surges in gold prices seen in January, followed by a decline at the month’s end, have directly influenced buying behavior in the market. Historically, gold tends to shine during times of crisis, whether economic or geopolitical, as is currently evident amid rising global tensions and inflation rates, all favoring the yellow metal.
Al-Marzouqi adds that despite significant price increases followed by declines, demand for gold has not diminished entirely but rather transformed; there has been a noticeable increase in demand for gold bullion for saving and investing purposes, while consumption and decorative purchases have decreased. Investors and those with financial surpluses are increasingly converting liquidity into gold, viewing it as a safe haven that outperforms holding cash, particularly as the purchasing power of money diminishes due to inflation. However, a broad segment of traditional consumers, especially those purchasing gold for gifts during occasions like graduations or births, have been adversely affected; their budgets, typically ranging from 1,000 to 1,500 AED, can no longer afford the same pieces acquired three to four years ago, leading to their near-exit from the market. Likewise, couples preparing for marriage now face greater challenges, as budgets that once sufficed no longer meet their current needs amid prevailing prices. Yet, some consumers remain cautious, having not fully adapted to the new price levels and hoping for a slight decrease, although projections do not suggest a significant decline in the near or medium term, especially with ongoing global geopolitical tensions.
With regards to investment, Al-Marzouqi continues his analysis, saying that a segment of consumers has transitioned into investors, as saving in gold becomes a popular option, particularly among those with financial surpluses in banks, after witnessing gold achieve impressive gains exceeding 25% since the beginning of the year within a brief period, a substantial yield for just one month, solidifying many people’s belief in the value of investing in it.
As for global demand, he notes that interest is no longer confined to specific nationalities or markets; the world has become akin to a small village due to heightened investment awareness through social media, contributing to a widespread culture of investing in gold bullion. Estimates suggest that the rise in gold prices is likely to continue in the medium term throughout this year, with potential for prices to reach $6,000 per ounce by year-end and even approximately 700,000 AED per kilogram. These expectations are based on escalating geopolitical crises, trade wars, and the trend of several countries reducing their dollar holdings in favor of gold, which remains one of the most prominent hedging instruments in the current scenario, despite the challenges posed by high prices for many consumers.