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Sun, Nov 16, 2025 | Jumada al-Awwal 25, 1447 | Fajr 05:16 | DXB 
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UAE: Why more people are buying gold over stocks
Gold repeatedly hit record highs in August as investors sought safe-haven assets amid growing global instability and expectations of a more accommodative US monetary policy
A growing number of investors in the UAE and broader Gulf region are reallocating their portfolios from equities to gold, following a strong rally in the precious metal.
According to analysts, ongoing geopolitical tensions, a slowing US economy, and anticipated interest rate cuts are likely to continue supporting gold prices. This has prompted both regional and global investors to reassess their investment strategies.
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“Since mid-August 2025, gold has advanced nearly 17 per cent. This increase significantly outpaced stock markets in the Middle East. Over the same period, Dubai retreated almost four per cent, Abu Dhabi fell around two per cent, and only the Tadawul managed gains of more than five per cent, thanks to its rebound during the last few days,” Dat Tong, Senior Financial Markets Strategist at Exness, told Khaleej Times.
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As of Thursday afternoon, spot gold was trading close to all-time high at $3,890.66 per ounce, up 0.51 per cent. Analysts anticipate the rally to persist, with prices potentially reaching $4,000 by 2025 or early 2026.
In the UAE, Dubai Jewellery Group data showed 24K gold selling at Dh467.25 per gram and 22K at Dh432.5.
Tong noted that gold surged 27 per cent in 2024, underscoring its role as a hedge amid a year dominated by geopolitical uncertainty, global elections, and market volatility.
By contrast, Gulf equity markets posted mixed performances. Dubai’s DFM Index rose 26 per cent in 2024, while the ADX General Index in Abu Dhabi and Saudi Arabia’s Tadawul All Share Index showed more modest gains.
Gold repeatedly hit record highs in August as investors sought safe-haven assets amid growing global instability and expectations of a more accommodative US monetary policy. “The metal is up nearly 47 per cent year-to-date, even as equity benchmarks such as the S&P 500 and Nasdaq remain near record levels. This parallel rally of both gold and stocks is unusual, but a growing number of investors are reallocating from equities into gold as concerns mount over slowing economic momentum and heightened geopolitical risks. The shift is evident in fund flows, with holdings increasing compared to last year,” Tong added.
Vijay Valecha, Chief Investment Officer at Century Financial, pointed out that September marked gold's best monthly performance in over 16 years, far outpacing most major other asset classes.
He emphasised that investors are not abandoning equities entirely. Instead, they are maintaining exposure to stocks for growth and to bonds for income, while incorporating gold as a hedge against persistent macroeconomic and geopolitical risks.
He explained that the increased capital flow into gold reflects a strategic diversification move rather than a wholesale exit from equities. “Gold has reclaimed its role as a stabiliser within multi-asset portfolios, with allocations rising in tandem with, not instead of, stocks and bonds, reflecting a world where ‘higher for longer’ uncertainty is becoming the norm,” he said.
Gold to outperform GCC stocks
Valecha added that the shift toward gold is especially evident among high-net-worth individuals in the region, who are typically less sensitive to price movements.
“In H1 2025, the cash allocation to portfolios of UAE investors declined below the global average of 20 per cent to approximately 13 per cent, with a shift towards physical gold bars, investments via digital platforms, and tokenized bullion. Broadly, gold allocations within portfolios increased by five points, considering gold’s heightened appeal as a portfolio diversifier and safe-haven instrument with a proven track record of retaining its value in turbulent market conditions,” said Century Financial’s CIO.
Dat Tong of Exness also highlighted gold’s strong momentum, suggesting it could continue to outperform GCC equities in the short term. This outlook is supported by both macroeconomic factors and geopolitical developments.
“Markets now expect the US Federal Reserve to deliver two rate cuts before year-end 2025, a shift that typically weakens the dollar and Treasury yields, thereby enhancing gold’s appeal. Signs of a cooling US labour market, most notably the September decline in private payrolls, have reinforced expectations of policy easing,” he said.
Additionally, a potential US government shutdown in October could further weigh on investor sentiment toward riskier assets. “Geopolitical tensions, from the Middle East to Eastern Europe, provide an additional layer of support, sustaining safe-haven demand. While equities could eventually benefit from looser policy, the balance of risks currently favours gold,” Tong concluded.
Waheed Abbas
Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.
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