5 Benefits of Adding Gold to Your Portfolio (For UAE Investors)

Gold has been flying so far in 2025. If crossing the $3,000 mark was historic, it showed that it could do better when it crossed the $4,000 threshold seven months later. If current trends continue, this could be the most bullish year for the asset.

Perhaps a look at this performance has led you to inquire about how to invest in gold in the UAE. But maybe a part of you is wondering if 2025 was just a blip. “Is gold really worth trading or investing in?”

In what follows, we will consider three reasons why investors might want to consider adding gold to their portfolio and two reasons why traders should do the same.

3 benefits of gold to investors

Let’s start with the benefits of gold to investors.

1. Gold is a store of value

An asset is a store of value when it can sustain its worth over time without depreciating.

Gold, being a precious metal, has a limited supply. In other words, it is a finite resource. Furthermore, its supply is set to peak by 2026 and start declining by 2028.

When an asset has a limited supply, no one can devalue it by arbitrarily increasing its supply. Thus, its value (price) will depend mostly on demand.

Contrast gold with a fiat currency like the dirham (AED) or the US dollar (USD). The central bank of both countries can decide to increase the supply of the currency, leading to a depreciation in its value.

Also, on the demand side, gold benefits from institutional support as central banks and institutional investors purchase gold because of its value as a safe haven and possible inflation hedge.

Thus, given its limited supply and consistent demand, you can be reasonably confident that gold will keep its worth over the long term.

2. Gold is a safe haven

Eight recessions occurred in the US between 1973 and 2020. In six of these, gold produced positive returns and outperformed the S&P 500.

When Russia invaded Ukraine and stock markets panicked, gold kept flying. As we noted above, it kept making new all-time highs in 2025 even when equity markets faced turbulence from Trump’s tariff policy.

An academic study even showed that gold has acted as a safe haven during economic and financial crises as far back as 1258.

In essence, when traditional equity markets are selling off due to a manifestation of systematic or undiversifiable risk, gold has been known to shine and provide a safe harbour for investors.

3. Gold is a diversification tool

Gold has low correlation to US, global, emerging market, Asian Pacific, and Japanese stock equities. It also has low correlation to US, UK, German, Japanese, and global fixed-income securities (government bonds, bills, corporate bonds, municipal bonds, etc.).

Given its value as a safe haven and low correlations to traditional securities, adding gold to a traditional stock/bond portfolio can help to reduce the portfolio’s risk and increase its risk-adjusted returns.

2 benefits of gold to traders

Gold also provides benefits for traders who are looking to take advantage of short-term price fluctuations.

4. Gold is liquid

Gold is one of the most liquid assets in the world. Its daily trading volume competes with that of major currency pairs and stock indices.

If we combine trading volume on gold exchanges, over-the-counter (OTC) markets, and the ETF market, gold has more trading volume than the Dow Jones Industrial Average (DJIA), UK gilts, US Treasury bills, Euro/Yen pair, German bunds, US Treasury bonds (7-10 years and 20 years +), and Euro/Sterling, among others.

This means gold traders don’t have to worry about illiquidity; they can enjoy fast execution, tighter bid-ask spreads, and less slippage.

5. Gold is volatile

Also, though gold’s price is not erratic like some crypto markets, it is volatile enough to generate profit opportunities for traders.

It reacts to factors like interest rate changes, central bank policies, inflation data, and geopolitical tensions. Any of these can result in large price swings that traders can benefit from.

If you are an investor or trader, you can buy and sell gold in the UAE through Daman Markets.

As a financial institution with 25 years of experience in the local UAE market, Daman Markets by Daman Securities has everything to make your trading journey smooth: trading tools for fundamental and technical analysis, fast execution, personalised support, fast deposits and withdrawals, and learning resources.

Also, they provide direct exposure to gold through gold CFDs and gold futures. These allow you to track the price movement of gold and benefit from its fluctuation.

If you are ready to enjoy these benefits of gold in the UAE, Daman Markets is a broker that can help you take advantage of the opportunities in the gold market.

Author Profile

Adam Regan: Deputy Editor

Features and account management. 7 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com