UAE – The immediate drop in gold prices and the EUR/USD rate soon after the US election reflects market anticipation of a US-centric policy shift, which could adjust global capital flows and impact the UAE’s purchasing power and inflation.
As a trade and investment hub closely aligned with the dollar, the UAE remains well-positioned to capitalise on these trends, provided businesses and investors are attuned to the rippling effects of American fiscal policy, said Bas Kooijman, CEO and Asset Manager of DHF Capital.
According to Kooijman, the economic impact of US election result was swiftly apparent, as gold prices fell from $2,740 to $2,701 and the EUR/USD exchange rate dropped from 1.093 to 1.073, even before the final election results had been fully tallied. Last week, gold prices dropped even further, dipping below $2,600 for the first time since September 20.
Peg to dollar
Kooijman commented: “Given the dirham’s peg to the US dollar, fluctuations in the American economy reverberate across the UAE’s financial landscape. This alignment introduces both opportunity and caution for investors here, especially in areas like gold and foreign exchange. While gold could face near-term downside risks, the recent election outcome has immense potential to prompt long-term demand for the metal, particularly if current political and economic uncertainties hold steady or additional instability emerges. Monitoring these developments will be essential for strategic financial planning in the UAE as we approach 2025.”
Looking ahead, the UAE real GDP is projected to grow at 4.1% in 2025, according to the World Bank’s latest Mena Economic Update, underscoring the region’s resilience and growth prospects despite potential market volatility. This outlook, paired with the UAE’s strategic diversification efforts, underscores a promising trajectory for sustained economic strength in an increasingly interconnected global economy.
Kooijman continues to lead his investors to high ROIs on their investments by facilitating portfolio diversification for several HNWIs and UHNWIs both locally and abroad, investors who partnered with him five years ago have witnessed a minimum average ROI of 110%; effectively more than doubling their initial investment and seeing sixty consecutive months of positive returns.
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