Gold has symbolized wealth and stability for centuries. It’s back in the spotlight today. Currencies are losing their value due to inflation, markets are shaking, stocks are falling. And the metal is growing. In February 2025, an ounce was worth $2,900. In March, it exceeded $3,000. In April, it reached a record of $3,163.25. While the S&P 500 index sank by 3.37%, gold provided 18.53% of income. These figures speak louder than any forecasts.This contrast has become the main argument for those who seek reliable capital protection.
Page Content
Physical Gold: Tradition and Associated Risks
Bullion and gold coins represent the “tangibility” of investments. In Dubai, the historic Gold Souk market has over 380 merchants offering everything from bullion to jewelry. But owning a physical metal comes with inconveniences. Storage in safe deposit boxes or safes costs money. Added to this are the premiums for minting and transportation, as well as the transaction costs of buying and selling. Large bars are more difficult to sell quickly, and their liquidity is lower. Even in stable Dubai, the risk of theft or loss cannot be ignored.
Portfolio Diversification through ETFs, ETCs, and Funds
Modern investors are increasingly moving away from physical ownership. Mutual funds, ETFs and ETC allow you to invest in gold without holding it in your hands. ETFs, such as SPDR Gold Shares, hold real bullion in vaults and publish a list of them daily. Such products are liquid, traded on the stock exchange in real time and make it easy to enter the market. Mutual funds work differently; they are evaluated once a day and often have higher fees, but they offer professional management and ready-made portfolios. These tools are devoid of storage and security issues, but they take away the emotional feeling of “owning metal.”
Digital Gold and the Process of Tokenization
Digital gold has become an opening for small investors. The minimum amount in the Emirates can be as little as Dh10 or 0.1 grams. The transaction is confirmed by a digital certificate, and the metal is stored in certified vaults. Tokenization went even further: each unit on the blockchain is associated with a specific volume of gold. The XAUt token, for example, is backed by one ounce 31.1034768 grams and is divisible to 0.000001 ounces. This crushing makes gold available literally from the price of a cup of coffee. In fact, the ease of buying small amounts of gold online feels similar to opening a digital bank account in the UAE, where accessibility and transparency drive participation. In 2023, the volume of gold trading in the UAE reached $129 billion, and it was tokenized instruments that largely stimulated growth.
Fractional Gold: Investor Flexibility and Accessibility
Fractional coins and tokens are a tool for those who prefer regular small purchases. 1/2, 1/4, 1/10 oz and even less options are available on the market. In a crisis, such coins can be easily exchanged or sold without affecting large assets. But they have a disadvantage: a high premium. The margin can reach 9-15%, which makes transactions less profitable. However, the ability to buy gradually and maintain liquidity outweighs these costs for many investors.
Macroeconomic Context: Global Supply and Demand Dynamics
Gold retains its value due to limited supply. Production has been declining since 2000, and forecasts indicate possible insolvency by 2050. At the same time, demand is generated from four sources: investment, technology, the jewelry industry and central banks. In 2024, jewelers used 1,877 tons, accounting for 44% of global demand. Central banks are also increasing purchases, especially after 2022, when geopolitical tensions have pushed many countries to diversify reserves. In historical retrospect, gold proved its power: in 1973-1979, with an inflation rate of 8.8%, it provided an average of 33.5% of income annually.
A wide range of solutions is available in Dubai: physical gold preserves cultural value, ETFs and ETC provide transparency and liquidity, digital and tokenized gold make market entry accessible to everyone. Fractional gold is suitable for those who prefer flexibility and gradual accumulation. Analysts’ forecasts promise growth to $3,675–3,700 by the end of 2025 and a possible excess of $4,000 in 2026. For long term investors, gold remains the backbone of the portfolio, and for traders it is a source of speculative opportunities. In Dubai, this metal continues to shine not only on shop windows, but also in the strategies of smart investors.
