How UAE Investors Are Navigating Gold and Forex Markets…

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Most Traded Forex Pairs Among UAE Investors

Forex trading activity in the UAE is heavily concentrated around major currency pairs due to their liquidity, tight spreads, and predictable volatility patterns. Among these, EUR/USD remains the most actively traded pair, driven by continuous economic divergence between the US Federal Reserve and the European Central Bank.

USD/JPY is another key focus for UAE traders, largely influenced by Japan’s long-standing monetary policy shifts compared to the US interest rate cycle. This pairing often experiences strong directional moves, making it attractive for both short-term and swing traders.

GBP/USD also maintains strong popularity due to its volatility and sensitivity to UK economic data and Bank of England policy decisions. Many UAE traders prefer this pair for its frequent price swings, which create multiple entry and exit opportunities.

In addition, regional traders are increasingly monitoring USD-linked pairs as the US dollar continues to act as the primary driver of global forex movements. The divergence in central bank policies across major economies continues to shape trading strategies and pair selection.

Gold Investing 

Market Performance: Gold prices have experienced a significant surge, reaching approximately $2,900 per ounce as of February 2025, driven by robust demand and favorable market conditions. 

Farah Mourad, senior market research analyst at Equiti Group, says: “The strong demand is clearly carrying over into 2025, following central banks’ massive purchase of 1,045 tonnes of gold in 2024, the third year in a row they’ve added over 1,000 tonnes, far above the long-term average. 

“If they keep this pace, it’s a strong vote of confidence in gold’s value and could help keep prices steady. Meanwhile, if the US decides to revalue its gold reserves, especially with doubts swirling about how much they actually hold, it could set off a major market reaction, drawing in more investors and sending prices even higher.”

Price Forecasts: Analysts project that gold prices may climb to $3,000 by the end of the year, with potential to reach $3,400, influenced by factors such as geopolitical tensions and central bank policies. 

“After the latest recovery from $2,955, some in the market might wonder if gold is overvalued. However, the rebound seems more like a reaction to a sharp drop in US markets, which temporarily pushed demand for cash. As the dust settles, gold’s role as a hedge is coming back into focus,” Farah Mourad, senior market research analyst at Equiti Group, says. 

“Despite record highs, gold might still be undervalued when you consider the expanding money supply. The ratio of gold to the money supply has dropped to just 0.13 – only 30% of what it was in 1980. This suggests that gold’s current price might have much more room to rise, especially if inflationary pressures persist and central banks keep diversifying their reserves,” she adds. 

Investor Sentiment: The precious metal’s appeal as a safe-haven asset remains strong amid global economic uncertainties, prompting both individual and institutional investors in the UAE to increase their gold holdings.

Ahmed Azzam, Regional Financial Market Analyst at Equiti Group says: “Central banks added 18 metric tons of gold to reserves in January, extending a multiyear trend of strategic buying amid geopolitical and economic uncertainty. Their approach remains disciplined: purchasing during price dips while keeping sales minimal and tactical. 

“Since 2022, this pattern has intensified as institutions prioritise gold’s stability against shifting risks – from geopolitical tensions to trade tensions – reinforcing its role as a cornerstone of reserve management,” he adds. 

Forex Investing

Market Expansion: The Middle East’s online trading industry is on a rapid growth trajectory, projected to reach a value of $1 trillion by 2025, with the UAE playing a central role.

Brian Myers, Chief Commercial Officer at Equiti Group, says: “In recent years, the UAE has emerged as a hub for the online trading industry, attracting top talent from across the sector. The Middle East is one of the few regions in the world where client numbers are expanding rather than contracting. The growth is impressive and shows little sign of slowing.”

Investor Strategies: Traders are focusing on major currency pairs like EUR/USD and USD/JPY, capitalizing on market liquidity and volatility. The divergence in monetary policies and economic performance across regions is creating trading opportunities.

“When central banks dance to different tunes – some hiking rates, others cutting – traders have great opportunities. Recently, EUR/USD and USD/JPY have been attracting a lot of attention due to this exact divergence. The Fed’s cautious stance versus the European Central Bank’s steady approach created volatility in EUR/USD, offering traders opportunities to capitalise on short-term moves,” Farah Mourad, senior market research analyst at Equiti Group, says. 

Meanwhile, the stark contrast between the Bank of Japan’s ultra-loose policies and the Fed’s tightening bias has made USD/JPY a hotspot for traders seeking to leverage the volatility. This divergence isn’t just a buzzword; it’s the rhythm driving forex markets right now,” she adds. 

Ahmed Azzam, regional financial market analyst at Equiti Group also shares: “Traders have been divided in their choices between the USD/JPY and EUR/USD pairs and others, reflecting the diverging monetary policies of the three major economies. The Federal Reserve cut interest rates three times in the last quarter of 2024, totalling a 1% reduction. Meanwhile, the European Central Bank continued its easing cycle with a sixth consecutive rate cut, whereas the Bank of Japan raised rates three times, moving away from negative interest rates.”

“Each central bank adjusted its monetary policy and provided forward guidance based on economic conditions – whether inflation was nearing the 2% target or concerns over economic slowdown prevailed. Additionally, US tariffs added another layer of uncertainty, making the US dollar a key driver in currency movements. Market sensitivity to inflation risks and growth concerns fuelled volatility, pushing the EUR/USD pair up by 6% since the start of the year, while the USD/JPY pair declined by approximately 6.6%,” he adds. 

Risk Management Strategies for Forex Traders in the UAE

Effective risk management is essential for UAE forex traders, especially in highly volatile global markets influenced by central bank decisions, geopolitical events, and shifting liquidity conditions.

One of the most widely used strategies is position sizing, where traders limit exposure per trade to a small percentage of their total capital. This helps reduce the impact of unexpected market reversals and preserves long-term account stability.

Stop-loss orders are another critical tool, allowing traders to automatically exit positions when the market moves against them beyond a predefined level. This prevents emotional decision-making and helps control downside risk.

Diversification across multiple currency pairs is also commonly practiced to avoid overexposure to a single economic region or policy environment. By spreading trades across different assets, traders can balance volatility and reduce correlation risk.

Additionally, many UAE traders closely follow macroeconomic indicators such as inflation data, interest rate announcements, and US dollar trends to adjust their strategies in real time. Combining technical analysis with fundamental insights has become a standard approach for managing risk in today’s forex markets.

Gold Price Forecast in UAE: 2025–2026 Outlook

Gold is expected to remain a strong focus for UAE investors throughout 2025 and into 2026, supported by ongoing global uncertainty, central bank accumulation, and inflationary pressures. After reaching around $2,900 per ounce in early 2025, analysts suggest the metal still has room for further upside, with projections pointing toward $3,000 and potentially $3,400 if macroeconomic risks intensify.

A key driver behind this outlook is sustained demand from central banks, which have consistently purchased over 1,000 tonnes annually in recent years. This structural buying provides a solid price floor, reducing the likelihood of sharp long-term declines even during temporary market corrections.

Geopolitical tensions and shifts in US monetary policy are also expected to play a major role. If inflation remains persistent or interest rate cuts slow down, gold could continue to strengthen as investors seek safe-haven protection. In contrast, a stronger US dollar or aggressive rate hikes could limit short-term gains.

For UAE investors, gold is likely to remain both a hedge and a long-term wealth preservation tool, with price volatility offering opportunities for strategic accumulation.

The post How UAE Investors Are Navigating Gold and Forex Markets… first appeared on Cryptsy and is written by Ethan Blackburn