Dubai: Gold prices witness slight drop, 24K trading at Dh402.5
According to analysts at World Gold Council (WGC), gold prices could see a moderate increase in the second half of 2025, driven by trade tensions, US inflation dynamics and monetary policy.
The precious metal entered the second half of 2025 coming off an exceptionally strong start to the year — up 26 per cent — shaped by a weaker US dollar, persistent geopolitical risk, robust investor demand, and continued central bank purchases.
With gold prices reaching an all-time high this year, jewellery shoppers and investors in Dubai and the UAE have been wondering whether they should buy or sell.
'While some of these drivers are expected to persist, the path forward remains highly dependent on multiple factors, including trade tensions, inflation dynamics, and monetary policy. Consensus expectations suggest a relatively steady finish for gold with moderate upside potential if macro conditions hold. Gold could also be partly supported by contributions from new institutional investors, such as Chinese insurance companies,' World Gold Council analysts said in the half-yearly report.
Gold has been rallying over the past couple of years due to geopolitical tensions, buying by central banks and the US tariffs row with its trading partner.
The WGC analysts noted that 'a more volatile geopolitical and geo-economic scenario could push gold significantly higher, particularly if more substantial stagflation or recession risks materialise and investor appetite for safe-haven assets grows.'
On the other side, analysts said widespread and sustained global trade normalisation would bring higher yields and resurgent risk appetite, challenging gold's momentum. Gold could also be tested by a visible deceleration in central bank demand beyond current expectations.
"We believe that gold, through its fundamentals, remains well-positioned to support tactical and strategic investment decisions in the current macro landscape,' they said.
If the market turns bearish, WGC analysis suggests that gold could retreat by 12 per cent to 17 per cent in the second half, finishing the year with positive but low double-digit or even single-digit returns.
'The reduction in risk, combined with an increase in opportunity cost — through rising yields and a stronger dollar — would trigger gold ETF outflows and reduce overall investment demand. We could also see a deceleration in central bank demand if US Treasuries are again favoured. Gold market technical analysis and speculative positioning suggest that $3,000/oz would be a natural 'support level', prompting opportunistic investment buying. If gold were to break through these levels, disinvestment may accelerate,' analysts said.
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