Vijay Valecha, Special to Gulf News October 12, 2021
Gold price is likely to remain under pressure as investors continue to exit gold ETFs and tight global supply chain conditions ease which reduce the metal’s safe-haven appeal, analysts said.
Last week, gold rose to $1,800, but a confluence of 100 and 200-day moving average at that level acted as a strong resistance. The decline in yellow metal came about as the risk sentiments improved following a decrease in the producer price index (PPI), which eased inflation fears.
The precious metal closed the week at $1,767.63 per ounce, down 1.52 per cent. In the UAE, 24K was trading at Dh214.0 per gram, 22K at Dh201.0, 21K at Dh191.75 and 18K at Dh164.5 on Sunday morning.
“There are also expectations that supply-side bottlenecks will ease following the decision of some US ports to work 24 hours a day for three months. Vietnam, a key cog in the global supply chain, is also normalising. Automobile major Toyota has ramped up production, and Hyundai's US chief has stated that the worst of chip shortage is behind us.
Thomas Westwater, an analyst at DailyFX, said high-impact economic events will likely be key to the outlook.
“With that in mind, this week will bring Chinese third-quarter GDP, with analysts expecting a 5.2 per cent figure to cross the wires, according to a Bloomberg survey. A better-than-expected print may reinvigorate bullish bets over the global economic recovery. That could drag gold prices lower,” he added.