Gold jewellery prices in Dubai have dropped to one of their lowest price levels this year, as the market anticipates a US decision in favour of another borrowing rate increase.
The bullion had earlier fallen from the key support level of $1,200 an ounce during the weekend before barely rising by 0.1 per cent. Analysts are predicting price fluctuations over the next couple of months, with the yellow metal forecast to oscillate between $1,100 and $1,300 an ounce.
In Dubai, the price of 24-karat gold was at Dh146 per gram as of Sunday, which is Dh6.25 cheaper than in the beginning of the month.
The current retail price is also Dh1.75 lower compared to January 31 prices. Gold fans in Dubai saw the price of 24K rising to Dh152.25 per gram on February 26 and March 1, posting a 9.1 per cent gain since the beginning of the year.
Nevine Pollini from UBP said there are several factors weighing on gold’s performance and these include the hawkish US Federal reserve tone, concerns surrounding Brexit and fears about the upcoming French, German and Dutch elections.
“We continue to believe that, barring any serious geopolitical problems, gold will remain range-bound for the next couple of months, oscillating between $1,100 and $1,300, as the strong US economy and the Fed’s consequent approach to monetary tightening will remain the key driver for gold prices in 2017,” Pollini said.
On Friday, spot gold slumped to $1,194.55, its lowest since January 31, but later inched up by 0.1 per cent, according to Reuters.
Overall, the previous week was “horrid” for the precious metal, according to Ole Hansen of Saxo Bank. Gold fans who want to know where the bullion is headed this week are advised to watch out for the performance of equities, bonds and greenback.
“[Gold] had another horrid week with the technical outlook deteriorating further. Several key levels of support were broken as the market once took fright ahead of a US rate decision,” noted Hansen.
“Whether we are going to see a repeat very much depends on the continued trajectory of stocks, bonds and the dollar.”
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