Can UAE investors still rush to gold, bonds for safety as volatility becomes new normal?

Dubai: Gold, bonds, and select emerging markets could offer investors some protection as global markets brace for another highly volatile year.

That was the message from Emirates NBD as it unveiled its Global Investment Outlook 2026, themed Eyes Wide Open, at a media roundtable in Dubai on Monday. The bank said 2026 would present opportunities but warned investors not to expect the kind of returns seen last year.

“Gold is the insurance you need to have because it’s a dangerous world, and it’s your currency; you cannot print,” said Maurice Gravier, Group Chief Investment Officer, Wealth Management, at Emirates NBD.

He added that portfolio construction and diversification matter more than ever. “Bonds will be the safest,” Gravier said, pointing to the need for balance rather than chasing high returns.

After strong gains of 13 to 20 percent in USD terms in 2025, Gravier cautioned that 2026 returns are likely to be far more modest. “There’s no way we can get that again. Best case, we expect five to seven percent,” he said.

Gold & EMs

While urging caution, Emirates NBD said it remains overweight on gold and emerging markets, both in bonds and equities.

“Emerging markets have lower valuations and stronger growth,” Gravier said, adding that within emerging markets, the GCC stands out as a ‘blue chip’ region for investors.

He acknowledged that volatility would remain high. “It’s going to be very volatile — as volatile as last year — but with less upside,” he said.

The bank said selectivity will be key, especially within higher-yield assets. “You are paid for the risk,” Gravier noted, while stressing the importance of understanding where that risk lies.

Jobs & AI

Beyond markets, Emirates NBD flagged growing concern around jobs in a post-AI world, particularly during the transition phase.

Gravier described the outlook as “doom and gloom in the transition,” driven by the speed at which technology is advancing compared to society’s ability to adapt.

“To generate revenue, AI brings productivity gains—and substitution for jobs. That’s how it is,” he said. “People will probably have new jobs, or no jobs at all, and be happy. We don’t know. The issue is speed.”

He pointed to worrying early signs, especially among younger workers. “For the first time in 30 years, fresh graduates in the US have a higher unemployment rate than the national average,” Gravier said.

In sectors such as law and consulting, he noted that firms are already hiring fewer juniors because AI tools can do much of the entry-level work. “That’s a problem — because who becomes the senior if you don’t hire juniors today?” he asked.

Risk factors

Emirates NBD highlighted several major risk factors that could test investors’ nerves in 2026.

These include geopolitical tensions, rising competition between countries, stretched government finances, and questions around AI infrastructure, including energy and water use.

“There is no real choice. Countries can’t opt out of AI,” Gravier said, noting that global competition makes slowing down difficult, even as regulation increases, particularly in Europe.

He also pointed to sectors where AI’s impact will become more visible—from finance and call centers to autonomous vehicles, where questions around liability and insurance remain unresolved.

Despite the risks, Emirates NBD said its central scenario for 2026 remains constructive — but with vigilance.

“This is no time for complacency,” Gravier said. “With a combination of confidence and healthy paranoia, eyes wide open, we are prepared to adjust exposure swiftly.”

The bank said diversification, discipline, and realistic expectations will define successful investing in the year ahead—especially as markets navigate deep, structural change.

What does it mean for UAE investors?

For UAE investors, the message is to lower expectations and focus more on protecting capital in 2026. Gold continues to stand out as a safety net rather than a speculative bet.

For UAE investors—many of whom already view gold as a long-term store of value—this reinforces its role as financial insurance during geopolitical stress, currency swings, and market shocks.

Gold doesn’t rely on interest rates, earnings, or government policy. In volatile periods, that independence matters.

The GCC also remains relatively resilient, supported by strong government finances and ongoing infrastructure spending. Rather than chasing quick gains, investors may need to prioritize diversification, patience, and the ability to adjust as conditions change.