Why Are Gold Prices Increasing in 2026? Complete Guide to Rising Gold Rate
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Gold prices have surged to record highs, climbing 55% in 2025 and surpassing $4,000/oz for the first time. With forecasts predicting prices could reach $5,000/oz by late 2026 and potentially $6,000/oz longer term, many are wondering: why is gold so expensive and will it continue rising?
Today's Dubai Gold Price (23-01-2026):
- 24K Gold: AED 597.00 per gram
- 22K Gold: AED 553.00 per gram
- 21K Gold: AED 530.25 per gram
- 18K Gold: AED 454.50 per gram
Whether you're looking to buy gold in Dubai, invest in gold coins, or purchase wedding jewellery, understanding the factors driving gold rates higher is essential for making smart decisions.
This comprehensive guide explores the 8 key reasons behind rising gold prices and what expert forecasts predict for 2026-2027.
Table of Contents
- Current Dubai Gold Rates Today
- Why Global Economic Uncertainty Drives Gold Demand
- How Inflation Impacts Gold Prices
- Central Bank Gold Purchases Explained
- UAE and Dubai Gold Market Trends
- Geopolitical Factors Affecting Gold
- Gold Supply vs Demand Analysis
- Gold Price Forecast 2026-2027
- Is Now a Good Time to Buy Gold?
- Gold Jewellery vs Investment Gold
Current Dubai Gold Rates.
Before diving into why gold prices are rising, here are today's official retail gold rates in Dubai, UAE:
Live Gold Price in Dubai (Updated: 23-01-2026, 10:00 AM)
| Gold Purity | Price per Gram (AED) | Best For |
|---|---|---|
| 24K Gold | AED 597.00 | Investment, coins, bars |
| 22K Gold | AED 553.00 | Traditional jewellery, bridal sets |
| 21K Gold | AED 530.25 | Arabian modern jewellery |
| 18K Gold | AED 454.50 | Daily wear, durable pieces |
Important Note: Always verify real-time gold prices at Dubai Jewellery Group member stores' digital display screens before making purchases. Prices fluctuate based on international gold rates and currency exchange rates.
Understanding Dubai Gold Pricing
24K Gold (99.9% purity) - The purest form, ideal for investment purposes including coins and bars. Current rate of AED 597/gram reflects the global gold price surge.
22K Gold (91.6% purity) - Most popular for traditional jewellery in UAE and Indian subcontinent. Offers excellent balance of purity and durability at AED 553/gram.
21K Gold (87.5% purity) - Preferred for Arabian modern jewellery designs. The AED 530.25/gram rate makes it attractive for elaborate pieces.
18K Gold (75% purity) - Best for daily wear jewellery due to enhanced durability. At AED 454.50/gram, it's the most affordable pure gold option.
1. Why Global Economic Uncertainty Increases Gold Prices
Global economic instability remains the primary driver of rising gold prices in 2026. When traditional markets falter, investors turn to gold as a safe haven asset.
Key Economic Factors Pushing Gold Higher:
High inflation rates across major economies reducing currency value
Slowing GDP growth in developed nations creating recession fears
Banking sector concerns following recent financial instabilities
Currency devaluation particularly affecting emerging markets
When stock markets become volatile and fiat currencies weaken, gold maintains its purchasing power. This fundamental characteristic makes gold an essential portfolio diversification tool during uncertain economic times.
2025 Performance: Gold posted extraordinary gains of 55% throughout 2025, surpassing $4,000/oz for the first time in October. Trade concerns, reduced U.S. dollar demand, and increased central bank buying created ideal conditions for this historic surge.
Expert Insight: According to Natasha Kaneva, head of Global Commodities Strategy at J.P. Morgan, "The trends driving this rebasing higher in gold prices are not exhausted. We expect gold demand to push prices toward $5,000/oz by year-end 2026."
2. How Inflation Drives Up Gold Rates in 2026
Inflation and gold prices share a direct relationship. As inflation erodes the value of paper currency, gold becomes more valuable as a wealth preservation tool.
Why Gold Protects Against Inflation:
✓ Limited supply - Unlike fiat money, gold cannot be printed infinitely
✓ Intrinsic value - Gold has maintained purchasing power for thousands of years
✓ No government control - Gold isn't subject to monetary policy manipulation
✓ Universal acceptance - Recognized globally as a store of value
With inflation remaining persistent across many countries, gold prices continue to climb. In Q3 2025 alone, investor and central bank gold demand totaled approximately 980 tonnes—over 50% higher than the previous four-quarter average. This translated to roughly $109 billion in quarterly demand inflow, about 90% higher than prior averages.
Real Example: Gold's role as an inflation hedge was proven in 2025 when prices climbed 55% amid persistent global inflation concerns, with institutional investors increasing allocations significantly.
3. Central Banks Are Stockpiling Gold at Record Levels
Central bank gold purchases have exceeded 1,000 tonnes annually for three consecutive years through 2025, reaching unprecedented levels. This institutional buying creates sustained upward pressure on gold prices and is expected to continue driving markets in 2026.
Record-Breaking Central Bank Activity:
2022-2025 purchases - Over 1,000 tonnes purchased annually for three straight years
2026 forecast - Approximately 755 tonnes expected (190 tonnes per quarter)
Historical context - Pre-2022 purchases averaged only 400-500 tonnes annually
Why Central Banks Continue Buying Gold:
Reserve diversification - Global central bank gold holdings now represent nearly 20% of official reserves, up from 15% at end of 2023
USD dependency reduction - Accelerating shift away from dollar-denominated reserves
Currency stability - Strengthening national currency backing with tangible assets
Strategic accumulation - Central banks with under 10% gold holdings are actively increasing allocations
According to Gregory Shearer, head of Base and Precious Metals Strategy at J.P. Morgan, strong central bank buying continued even in Q3 2025 despite gold prices exceeding $4,000/oz, demonstrating commitment to gold accumulation regardless of price levels.
Countries including China, India, Russia, Brazil, and Middle Eastern nations continue expanding gold reserves. Brazil alone purchased 15 tonnes in September and 16 tonnes in October 2025, while the Bank of Korea publicly discussed plans for additional gold purchases from a medium to long-term perspective.
Market Impact: Central banks globally hold nearly 36,200 tonnes of gold. If central banks currently holding under 10% gold increased to just 10% of reserves at $4,000/oz, this would require purchasing approximately 2,600 tonnes—creating massive upward price pressure.
4. Strong Gold Demand in UAE, Dubai & Middle East Markets
The UAE gold market, particularly Dubai, plays a crucial role in global gold dynamics. Dubai serves as a major gold trading hub connecting East and West.
Why Dubai Gold Demand Remains Strong:
Cultural significance - Gold is integral to Emirati and regional traditions
Wedding season demand - Bridal gold jewellery purchases peak year-round
Tourist purchases - Millions of visitors buy Dubai gold annually
Tax advantages - No VAT on investment gold in UAE
Making charge competitiveness - Dubai offers lower jewellery making charges
High purity standards - Guaranteed 22K and 24K gold quality
Even with rising prices, gold buying in Dubai remains resilient due to these factors, supporting sustained price levels.
Local Trend: Dubai Gold Souk continues to see strong footfall, with average transaction values increasing 30% year-over-year.
5. Geopolitical Tensions Push Investors Toward Safe-Haven Gold
Geopolitical uncertainty creates market volatility that benefits gold prices. Current global tensions include regional conflicts, trade disputes, and diplomatic uncertainties.
How Geopolitics Affects Gold:
Market instability - Stock markets react negatively to conflict news
Flight to safety - Investors move capital from risky assets to gold
Currency fluctuations - Political tensions weaken national currencies
Oil price volatility - Energy market disruptions impact broader economy
Gold consistently outperforms during geopolitical crises, making it an essential crisis hedge for sophisticated investors.
Historical Pattern: Gold prices typically spike 5-15% immediately following major geopolitical events.
6. Limited Gold Supply Cannot Meet Growing Global Demand
The gold supply shortage is a fundamental driver of higher prices. Unlike other commodities, increasing gold production is extremely difficult.
Supply-Side Constraints:
Declining discoveries - Major new gold deposits are increasingly rare
Rising mining costs - Extraction becomes more expensive with deeper mines
Environmental regulations - Stricter standards limit production expansion
Long development timelines - New mines take 10-20 years to become productive
Demand-Side Pressures:
Investment demand - ETFs, coins, and bars seeing record inflows
Jewellery consumption - Steady demand from India, China, and Middle East
Industrial applications - Technology sector needs for electronics
Central bank accumulation - Institutional buying at multi-decade highs
This supply-demand imbalance creates natural upward price pressure that's likely to continue.
7. Gold Price Forecast 2026-2027: What Experts Predict
Understanding where gold prices are headed helps inform buying decisions. J.P. Morgan Global Research provides detailed forecasts based on sustained investor and central bank demand.
Official Gold Price Forecasts:
Q1 2026: $4,400/oz average
Q2 2026: $4,655/oz average
Q3 2026: $4,860/oz average
Q4 2026: $5,055/oz average
End of 2027: $5,400/oz projected
Longer term: $6,000/oz possible
What's Driving These Forecasts?
Sustained demand - Projected 585 tonnes quarterly from investors and central banks
ETF inflows - Expected 250 tonnes of ETF demand in 2026
Physical demand - Bar and coin purchases forecast to exceed 1,200 tonnes annually
Central bank buying - Continued institutional accumulation of 190 tonnes per quarter
According to J.P. Morgan's analysis, approximately 350 tonnes or more of quarterly net demand from investors and central banks is needed for gold prices to rise each quarter. Every 100 tonnes above 350 tonnes translates to roughly a 2% quarter-over-quarter price increase.
With forecasted demand of 585 tonnes per quarter—well above the 350-tonne threshold—the mathematical foundation for continued price appreciation remains strong.
Is It Still a Good Time to Buy Gold in 2026?
Many potential buyers ask: "Should I buy gold now at AED 597/gram for 24K or wait for prices to drop?"
Considerations for Gold Buyers:
Current pricing context - At AED 597/gram for 24K gold (23-01-2026), prices are elevated but forecasts predict further increases to $5,000/oz by Q4 2026
Long-term perspective wins - Gold is best viewed as a multi-year investment, with projections showing continued appreciation through 2027
Dollar-cost averaging - Regular small purchases at various price points (today's AED 597/gram, AED 553/gram for 22K, etc.) reduce timing risk
Portfolio allocation - Financial experts recommend 5-15% gold allocation regardless of current price levels
Quality over timing - Focus on purity certification, Dubai Jewellery Group membership, and trusted sellers with transparent pricing
When Gold Buying Makes Sense:
✓ Long-term investment horizon - Gold is projected to reach $5,400/oz by end of 2027
✓ Wedding planning - Gold jewellery purchases shouldn't be delayed for price speculation
✓ Wealth preservation - Protection against currency devaluation and inflation
✓ Portfolio diversification - Reducing overall investment risk with 5-15% allocation
✓ Dollar-cost averaging - Regular purchases at $4,400-$5,000 range reduce timing risk
Dubai Gold Buying Advantages:
Competitive making charges - Often 30-50% lower than other markets, offsetting today's higher base price of AED 597/gram for 24K
No sales tax - Investment gold (24K coins and bars) is VAT-exempt in UAE, saving 5% compared to jewellery
High purity guarantees - Strict quality control and hallmarking certified by Dubai Jewellery Group
Wide selection - Largest variety of designs and weights available across all purities (24K at AED 597/gram, 22K at AED 553/gram, 21K at AED 530.25/gram, 18K at AED 454.50/gram)
Transparent pricing - Real-time price displays at Dubai Jewellery Group member stores show exact rates
International standards - Gold prices directly linked to global markets, ensuring fair pricing
Short-term price corrections can occur, but with expert forecasts predicting $5,000/oz by late 2026 and $5,400/oz by end of 2027, gold's long-term trajectory remains decisively bullish. Today's rate of AED 597/gram for 24K gold, while high historically, may represent value given projections of further 15-20% increases through 2026-2027.
8. Gold Jewellery vs Investment Gold: Which Should You Choose?
Understanding the difference helps optimize your gold buying strategy.
22K & 24K Gold Jewellery
Best for:
- Weddings and special occasions (22K at AED 553/gram ideal for bridal sets)
- Cultural and religious traditions (22K most popular in UAE)
- Gifting purposes (21K at AED 530.25/gram for Arabian designs)
- Wearable wealth (18K at AED 454.50/gram for daily use)
Considerations:
- Making charges apply (varies by design complexity, but Dubai rates are competitive)
- Resale value calculated on gold weight at current rates (today: 24K at AED 597/gram)
- Fashion and emotional value important
- Dubai offers excellent making charge competitiveness and transparent pricing
Pro Tip: Check real-time prices on Dubai Jewellery Group digital displays at retail stores before purchasing. Today's rates (23-01-2026): 24K AED 597/gram, 22K AED 553/gram, 21K AED 530.25/gram, 18K AED 454.50/gram.
Gold Coins and Gold Bars
Best for:
- Pure investment purposes (24K at AED 597/gram)
- Wealth preservation strategy
- Long-term holding (3+ years)
- Portfolio diversification
Advantages:
- Lower premiums over base gold price (today: AED 597/gram for 24K)
- Easier liquidity and resale at current market rates
- No design or making charges—pay only metal price plus small premium
- Standardized weights (1g, 5g, 10g, 1 tola, 1oz) and guaranteed 24K purity
- VAT-exempt in UAE (5% savings vs jewellery)
Smart Gold Buying Strategy
Many experienced buyers follow a balanced approach:
70% investment gold - Coins and bars for wealth preservation
30% jewellery - For personal use and cultural needs
This strategy combines the financial benefits of investment gold with the personal satisfaction of owning beautiful jewellery.
Frequently Asked Questions About Rising Gold Prices
What is today's gold price in Dubai?
As of 23-01-2026 at 10:00 AM, Dubai gold rates are: 24K gold at AED 597.00/gram, 22K gold at AED 553.00/gram, 21K gold at AED 530.25/gram, and 18K gold at AED 454.50/gram. Always verify real-time prices at Dubai Jewellery Group member stores' digital displays before purchasing.
Why is gold price increasing every day?
Gold prices increase due to economic uncertainty, inflation, central bank buying, geopolitical tensions, and supply constraints. These factors create sustained demand that outpaces available supply.
Will gold prices go down in 2026?
While short-term corrections are possible, expert forecasts from J.P. Morgan predict gold will average $4,400/oz in Q1 2026, rising to $5,055/oz by Q4 2026, with $5,400/oz projected by end of 2027. The fundamental drivers—central bank buying, investor demand, and economic uncertainty—support continued price appreciation.
Is Dubai the best place to buy gold?
Dubai offers significant advantages including no VAT on investment gold (24K coins and bars), competitive making charges 30-50% lower than many markets, high purity standards certified by Dubai Jewellery Group, transparent pricing with real-time displays, and a wide selection. With today's rate of AED 597/gram for 24K gold, the tax savings alone make Dubai attractive for serious buyers.
What purity gold should I buy?
- 24K gold (AED 597/gram today) - 99.9% pure, best for investment coins and bars
- 22K gold (AED 553/gram today) - 91.6% pure, ideal for traditional jewellery, most popular in UAE/India
- 21K gold (AED 530.25/gram today) - 87.5% pure, preferred for Arabian modern jewellery designs
- 18K gold (AED 454.50/gram today) - 75% pure, more durable for daily-wear jewellery
For investment purposes, always choose 24K. For jewellery, 22K or 21K offers the best balance of purity and durability in the UAE market.
How much gold should I own?
Financial advisors typically recommend 5-15% of investment portfolio in gold. With gold climbing 55% in 2025 and forecasts predicting further gains to $5,000-$5,400/oz through 2027 (equivalent to AED 650-700/gram range for 24K), many investors are increasing their gold allocations as a hedge against economic uncertainty.
Should I buy 24K or 22K gold in Dubai?
Buy 24K gold (AED 597/gram today) if your primary goal is investment and wealth preservation. It's pure, easier to liquidate, and VAT-exempt.
Buy 22K gold (AED 553/gram today) if you want jewellery for weddings, occasions, or cultural purposes. It offers better durability while maintaining high purity and value.
What is driving gold to $5,000 per ounce?
Three primary factors: (1) Central banks purchasing 755+ tonnes in 2026 despite high prices, (2) Investor demand of 585 tonnes quarterly from ETFs, bars, and coins, (3) Ongoing economic uncertainty and inflation concerns. Every 100 tonnes of demand above 350 tonnes adds approximately 2% to quarterly price growth.
Final Thoughts: Gold's Path to $5,000 and Beyond
Gold prices are rising due to a convergence of powerful economic forces that show no signs of exhausting: persistent inflation, economic uncertainty, record central bank purchases exceeding 1,000 tonnes annually, and unprecedented investor demand.
After surging 55% in 2025 to surpass $4,000/oz, expert forecasts from J.P. Morgan predict gold will continue its ascent toward $5,055/oz by Q4 2026 and $5,400/oz by end of 2027, with $6,000/oz possible longer term.
The mathematical foundation supporting these forecasts is compelling: projected quarterly demand of 585 tonnes from central banks and investors far exceeds the 350-tonne threshold needed for continued price appreciation.
Key Takeaways for Gold Buyers:
✓ Current prices may offer value - At AED 597/gram for 24K gold today (23-01-2026), prices appear high but forecasts predict rise to $5,000+ (AED 650+/gram range)
✓ Focus on certified, hallmarked gold from Dubai Jewellery Group member stores
✓ Verify real-time prices on digital displays at retail stores before purchasing
✓ Consider dollar-cost averaging given strong upward trajectory through 2027
✓ Take advantage of Dubai's competitive pricing - No VAT on 24K investment gold (5% savings)
✓ Balance investment gold (24K at AED 597/gram) and jewellery (22K at AED 553/gram) based on your needs
✓ View gold as long-term wealth preservation with 3-5+ year holding period
The Bullish Case Remains Intact:
Central bank commitment - 755 tonnes of purchases forecast for 2026 alone
Investor appetite - 1,200+ tonnes of bar/coin demand plus 250 tonnes ETF inflows
Structural trends - Dedollarization and reserve diversification have years to run
Supply constraints - Mining production cannot keep pace with demand
Whether you're buying gold for investment or selecting wedding jewellery, the current environment presents compelling long-term value. While short-term volatility will occur, the trajectory toward $5,000-$6,000/oz appears increasingly probable based on fundamental supply-demand dynamics.
Stay informed, invest wisely, and let gold protect your wealth through economic cycles.
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