UAE Gold Reserves Surge by Nearly 26 Percent Amid Global Economic Uncertainty
Central Bank of the UAE increases its gold reserves to $7.9 billion in the first five months of 2025, reflecting global trends of increased gold accumulation by central banks.
The Central Bank of the UAE has reported a significant increase in its gold reserves, rising by nearly 26 percent in the first five months of 2025.
This growth brings the total holdings to $7.9 billion, underscoring a global trend of central banks accumulating gold as a hedge against inflation, currency volatility, and geopolitical risks.
The move aligns with an international pattern where gold is used as a safe-haven asset amid economic uncertainty.
The UAE's increased reserves come amidst surging international gold prices, which have risen approximately 33 percent year-to-date, reaching record highs above $3,500 per ounce.
In Dubai, the price of 22-karat gold rose by 15.25 UAE dirhams per gram last week, nearing the 400 dirham threshold per gram.
Noureldeen Al-Hammoury, a chief market strategist at Squared Financial, explains that this trend reflects a broader strategy by the UAE to diversify its reserves and hedge against global financial instability.
It signals an attempt to ensure liquidity needs during uncertain economic cycles.
According to the World Gold Council, central banks have been net buyers of gold for over a decade, with annual purchases averaging about 1,000 tonnes in recent years.
The WGC's survey indicates that 95 percent of central bank reserve managers expect global gold holdings to increase further over the next 12 months.
While official sector demand is rising, consumer demand in the UAE has shown mixed trends.
Data from the World Gold Council for the first half of 2025 indicates a 16 percent year-on-year decline in demand for gold jewelry, contrasted with a 25 percent surge in demand for gold bars and coins, suggesting increased investment activity.
The UAE, historically not among the world's top official sector buyers, has positioned itself as a major gold trading hub.
In 2023, it handled over $129 billion in gold trade.
Analysts suggest that the UAE's growing reserves could influence broader institutional behavior, potentially leading to more capital flowing into gold-linked instruments.
The accumulation of gold by the UAE Central Bank is seen as a long-term strategy aimed at increasing financial resilience.
Investment demand is driving this increase, serving not only as a financial hedge but also as a confidence signal during periods of economic instability.
This shift aligns with growing interest in de-dollarization and a reduction of dependence on the US dollar.
Conflicts in the Middle East, the ongoing war in Ukraine, and trade tensions have motivated sovereign wealth funds to diversify into gold and alternative assets.
The future trajectory of the UAE's gold reserves is uncertain.
However, analysts predict that while record buying may not be repeated, gold will remain a core component of central bank reserves due to its performance during times of uncertainty.
The macroeconomic environment's shifts could influence future reserve strategies.
This growth brings the total holdings to $7.9 billion, underscoring a global trend of central banks accumulating gold as a hedge against inflation, currency volatility, and geopolitical risks.
The move aligns with an international pattern where gold is used as a safe-haven asset amid economic uncertainty.
The UAE's increased reserves come amidst surging international gold prices, which have risen approximately 33 percent year-to-date, reaching record highs above $3,500 per ounce.
In Dubai, the price of 22-karat gold rose by 15.25 UAE dirhams per gram last week, nearing the 400 dirham threshold per gram.
Noureldeen Al-Hammoury, a chief market strategist at Squared Financial, explains that this trend reflects a broader strategy by the UAE to diversify its reserves and hedge against global financial instability.
It signals an attempt to ensure liquidity needs during uncertain economic cycles.
According to the World Gold Council, central banks have been net buyers of gold for over a decade, with annual purchases averaging about 1,000 tonnes in recent years.
The WGC's survey indicates that 95 percent of central bank reserve managers expect global gold holdings to increase further over the next 12 months.
While official sector demand is rising, consumer demand in the UAE has shown mixed trends.
Data from the World Gold Council for the first half of 2025 indicates a 16 percent year-on-year decline in demand for gold jewelry, contrasted with a 25 percent surge in demand for gold bars and coins, suggesting increased investment activity.
The UAE, historically not among the world's top official sector buyers, has positioned itself as a major gold trading hub.
In 2023, it handled over $129 billion in gold trade.
Analysts suggest that the UAE's growing reserves could influence broader institutional behavior, potentially leading to more capital flowing into gold-linked instruments.
The accumulation of gold by the UAE Central Bank is seen as a long-term strategy aimed at increasing financial resilience.
Investment demand is driving this increase, serving not only as a financial hedge but also as a confidence signal during periods of economic instability.
This shift aligns with growing interest in de-dollarization and a reduction of dependence on the US dollar.
Conflicts in the Middle East, the ongoing war in Ukraine, and trade tensions have motivated sovereign wealth funds to diversify into gold and alternative assets.
The future trajectory of the UAE's gold reserves is uncertain.
However, analysts predict that while record buying may not be repeated, gold will remain a core component of central bank reserves due to its performance during times of uncertainty.
The macroeconomic environment's shifts could influence future reserve strategies.
