Gold investors will be looking at Russia-Ukraine military crisis, developments on the US interest rate and dollar movement in the coming week for further direction and any de-escalation in the Ukraine conflict will result in a pull-back in precious metal price, say analysts.
Gold declined on April 1 – the first day of a new quarter – as US Treasury yields and the dollar rose following a strong US labour report that may bolster the Federal Reserve’s case to use aggressive monetary policy to tackle inflation.
According to a US Labour Department report released on Friday, the US added 431,000 jobs and the unemployment rate decreased by more than projected.
Spot gold price closed at $1,924.8 an ounce on Friday, down 0.63 per cent. In the UAE, 24K price closed the week at Dh233.25 per gram, 22K at Dh219.25, 21K at Dh209.0 and 18K at Dh179.25 per gram.
In addition, traders believe that another interest rate hike of 24 basis points is still on the cards which would dampen the chances of precious metal’s upward movement.
Jeffrey Halley, a senior market analyst at Oanda, said gold remains trapped in a $1,920 to $1,950 range, but its inability to rally as the dollar and US Treasury yields fell this week is a concern and risks are still skewed to the downside.
“Gold has resistance at $1,950, with support at $1,920 and $1,915. A sustained break of the $1,880 region will probably trigger a capitulation trade, potentially pushing gold down to $1,800 an ounce,” said Halley.Source: