The year 2025 witnessed an unprecedented rise in gold prices, with annual gains exceeding 70%. In the UAE, gold prices saw a significant increase throughout the year, with the price of 24K gold climbing from approximately 318 dirhams at the start of the year to 540 dirhams by year-end.
Additionally, the price of 22K gold rose from around 294 dirhams to 501 dirhams, while 21K gold went up from about 285 dirhams to 480 dirhams. The price of 18K gold also increased, moving from approximately 244.5 dirhams to 411.75 dirhams by the end of the year.
As prices reached record levels this year, the World Gold Council noted a shift in consumer behavior; demand for gold bars and coins surged by over 25%, as many people turned to gold as a safe haven for savings rather than consumption.
According to reports from the World Gold Council, the value of gold bars held by the Central Bank of the UAE rose to 35.3 billion dirhams by the end of October, up from 33.5 billion dirhams at the end of September 2025, reflecting an increase of 1.8 billion dirhams. The value of gold bars had surged by 44% by the end of October, amounting to 10.8 billion dirhams, compared to about 24.5 billion dirhams in October 2024.
Entering 2025, gold started on a strong note, driven by escalating geopolitical tensions, expectations of global interest rate cuts, and increased purchases by central banks, trading within a range of $2,750 to $2,900 per ounce before continuing its upward trend throughout the year.
By the end of the year, gold had surpassed the $4,500 per ounce mark. This robust performance led market observers to dub 2025 as the “golden year for gold,” as the metal posted gains estimated between 65% and 70% throughout the year.
The strong start reflected expectations of interest rate cuts globally and a rising hedging against risks; when real yields on the dollar and bonds decline, gold prices tend to rise since it does not yield interest but maintains value in uncertain environments.
There are five key factors behind the market fluctuations in 2025:
1 Global Monetary Easing:
2025 saw a significant shift in the policies of central banks, particularly the U.S. Federal Reserve, which initiated a series of rate cuts. This weakened the dollar and reduced the opportunity cost of holding gold, causing a sharp spike in prices by mid-year.
2 Central Bank Buying Spree:
Central banks worldwide, notably in China, India, and Turkey, continued to purchase gold in record amounts throughout the year, creating a “solid foundation” for prices. Each time gold attempted a correction downwards, purchases by central banks quickly pushed prices back up.
3 Geopolitical Tensions and Trade Disputes:
Throughout 2025, gold remained the primary “safe haven” due to the ongoing and escalating global trade and political conflicts. Any sudden escalation in conflict zones resulted in immediate price surges of between $50 and $100 per ounce within days, keeping the market in a state of constant alert.
4 Shift Towards “Digital Gold”:
2025 saw significant capital flows into gold exchange-traded funds (ETFs), increasing the liquidity of these funds and making price fluctuations more sensitive to daily economic news, resulting in strong daily closing price volatility compared to previous years.
5 Inflation Concerns:
Despite efforts to control inflation, the cost of living remained high in many major economies throughout 2025. Individual and corporate investors turned to gold as a hedge against diminishing purchasing power of currencies, significantly boosting demand for gold bars and coins in the last quarter of the year.