That means those who hold off purchases can further save more than Dh30 on a 14-gram 24K necklace compared to this morning’s rate, or more than Dh250 compared to April 2018’s peak price.
Analysts are betting on the yellow metal to weaken and head south if the US Federal Reserve decides to increase its benchmark interest rate,
This Wednesday, the Fed is expected to adjust its benchmark interest rate by a quarter percentage point.
“Gold is something what we call as anti-dollar. It falls when dollar rises and rallies when dollar weakens. The relationship is best explained by the negative correlation of 80 to 85 per cent between gold and dollar,” he said.
The precious metal has been losing its shine for months now. The year-to-date decline, as of August 14, 2018 was in the range of 8 per cent to 16 per cent.
Based on the data compiled by Gulf News, current retail rates are more than Dh18 cheaper compared to the prices in April 3, when 24K gold was selling at a whopping Dh162 a gram.
Part of gold’s problem is that investors are resorting to other assets due to trade tensions between the United States and China.
“The US dollar rises when investor sentiment deteriorates, gold prices fall. The fact that gold prices behave like a safe haven asset is very much entrenched into the thinking of most investors,” said Georgette Boele of Abn Amro.
“Therefore, they have likely been disappointed that heightened trade tensions between the US and China, a foreign exchange crisis in Turkey and weakness in [emerging market currencies] have not resulted in higher gold prices.”
There are other factors that are putting a pressure on gold prices. The US economy, for one, is looking positive, with consumer confidence at an 18-year high and jobless claims at multi-decade low.