Gold Surges to $3,700, but UAE Stocks Continue to Shine in 2025

As global markets brace for the Federal Reserve’s decision later today, uncertainty continues to weigh on investor sentiment. With markets having fully priced in a 25bps cut – the US Central Bank’s first rate cut since 2024 – investors are questioning whether the Fed has waited too long to act, especially as cracks appear in the US labour market.

Josh Gilbert, Market Analyst at eToro, commented: "UAE equities have shown remarkable resilience this year, proving to be a stable option for investors navigating global uncertainties. With strong local investor confidence and diversification across key sectors, the UAE continues to stand out as a safe haven in 2025."

Markets remain in somewhat of a holding pattern, with the biggest risk being that the Fed sounds less dovish than investors anticipate. While market pricing suggests a series of cuts extending through the rest of 2025 and into early 2026, the Fed’s dot plot is unlikely to align with that optimism.

Against this backdrop of heightened global volatility, the UAE equity market has emerged as a clear source of strength. Unlike global indices, including the S&P 500 which have been rattled by tariff concerns, the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) have demonstrated remarkable resilience.

The DFM, in particular, has outperformed most major global indices in 2025. Including dividends, the market has delivered a stellar 22.9% year-to-date return, underscoring the region’s reputation as a “safe haven” for investors this year. Confidence remains robust, with 85% of UAE-based retail investors continuing to back local equities – a strategy that has proven increasingly prudent.

This resilience reflects broader investor confidence in the UAE economy. 63% of investors [are] very confident in the UAE economy, supported by a strong diversification push across non-oil sectors such as real estate, trade, and financial services. These areas have helped buffer the economy from external shocks, enhancing its stability in uncertain times.

Meanwhile, global risk-off sentiment has pushed gold to record highs of USD $3,700, alongside a weaker US dollar. Yet, with US earnings estimates trending higher, consumer spending remaining resilient, and significant liquidity still sitting on the sidelines, the outlook for equities remains constructive. Analysts suggest that while US equities may take a pause following a strong summer rally, the bull market story is "far from over."