Gold smashes $5,000 barrier as UAE buyers feel the heat

26/01/2026 05:25 AST

Gold blasted through the $5,000-an-ounce barrier for the first time, extending an extraordinary rally that has gripped global markets as investors seek refuge from geopolitical turmoil and financial uncertainty.

Bullion climbed as much as 2 per cent to above $5,085, propelled by a softer dollar and persistent fears over fiscal sustainability and policy volatility.

In the UAE, retail gold prices followed suit - with 24-carat gold trading around Dh601 per gram and 22-carat at about Dh556.50 per gram on Monday, reflecting the strongest global cues driving local markets.

These levels underscore the relentless ascent in bullion demand as buyers weigh jewellery purchases against rising safe-haven investment interest.

Gold has more than doubled over the past two years and is up over 17 per cent so far this year as investors flee sovereign bonds and currencies in what traders call the "debasement trade".

A sell-off in Japanese government bonds and mounting public debt across advanced economies have pushed asset allocators into hard assets. Meanwhile, renewed policy uncertainty in the United States, including pressure on the Federal Reserve's independence and escalating geopolitical flashpoints from Greenland to Venezuela and the Middle East, has rattled confidence.

"Gold is the inverse of confidence," said Max Belmont, a portfolio manager at First Eagle Investment Management. "It's a hedge against unexpected bouts of inflation, unanticipated market drawdowns and flare-ups in geopolitical risk."

Silver and other precious metals are also enjoying strong momentum. Silver recently crossed $100 an ounce and advanced more than 4 per cent on Monday, supported by robust retail demand from Asia to the Middle East. Platinum hit record highs and palladium remained elevated, signalling broad-based strength in metals prized for both industrial use and wealth protection.

Institutional demand remains vigorous. Western exchange-traded funds have added roughly 500 tonnes of gold since early 2025, while purchases by family offices and ultra-wealthy investors focusing on generational wealth preservation have emerged as a notable driver.

Central banks, too, continue to accumulate gold aggressively. Goldman Sachs estimates official sector purchases are averaging about 60 tonnes a month, significantly above pre-2022 averages, as emerging market monetary authorities diversify away from paper currencies.

Analysts are lifting their forecasts. Union Bancaire Privée sees gold finishing the year near $5,200 an ounce, while Goldman Sachs recently raised its December 2026 target to $5,400, citing sticky hedges against broad macro-policy risks.

With expectations building around potential Federal Reserve rate cuts under a new chair, the non-yielding bullion's appeal as a diversifier remains potent. "Many of the current geopolitical and fiscal uncertainties aren't going away soon," said a Dubai bullion trader. "Gold could stay in play for months, if not years, even as we see periodic pullbacks after strong gains."

Khaleej Times