The price of Gold in the United Arab Emirates remained relatively stable on Thursday, with data collected by FXStreet indicating that it stood at 290.59 United Arab Emirates Dirhams (AED) per gram. This price was only slightly higher than the previous day’s cost of AED 290.38. Similarly, the price per tola of Gold also showed minimal variation, standing at AED 3,389.51 compared to AED 3,386.96 the day before. FXStreet calculates local Gold prices by adjusting international rates (USD/AED) to the local currency and units of measurement. These prices are updated daily based on market rates, although they may differ slightly from actual local rates.
Gold has played a crucial role throughout human history, serving as both a store of value and a medium of exchange. While it is often prized for its luster and use in jewelry, Gold is also widely regarded as a safe-haven asset. This means that it is considered a reliable investment during times of economic uncertainty. Additionally, Gold is seen as a hedge against inflation and currency devaluation, as it is independent of any particular issuer or government. Central banks, in particular, hold significant reserves of Gold as a means of bolstering their currencies during turbulent periods.
Central banks are among the largest holders of Gold, with many increasing their reserves in recent years. In 2022, central banks added a record-breaking 1,136 tonnes of Gold valued at around $70 billion to their reserves. This surge in Gold purchases was the highest yearly increase on record. Central banks in emerging economies such as China, India, and Turkey have been particularly active in expanding their Gold reserves, signaling a growing trend towards diversification and economic stability.
The price of Gold is influenced by various factors, including its inverse correlation with the US Dollar and US Treasuries, both major reserve and safe-haven assets. When the Dollar weakens, the price of Gold typically rises, allowing investors and central banks to diversify their portfolios. Conversely, a strong Dollar tends to suppress Gold prices. Moreover, Gold is inversely correlated with risk assets, with its value often increasing during market downturns. Geopolitical tensions and economic uncertainties can also drive up Gold prices due to its perceived safe-haven status.
As a yield-less asset, Gold tends to perform well in environments of low interest rates, while higher borrowing costs can dampen its appeal. The behavior of the US Dollar also plays a significant role in determining Gold prices, as the precious metal is priced in dollars (XAU/USD). A strong Dollar typically exerts downward pressure on Gold prices, while a weaker Dollar tends to lift them higher. Overall, the price of Gold is subject to a wide range of factors, making it a unique and multifaceted asset in the global financial landscape.