Precious metal not likely to average $1,300 an ounce anytime soon
Gold is likely to feel a little pressure over the next few days, so fans of the yellow metals in the UAE are in for some declines in prices on the retail side, experts have said.
Spot gold hit a high of $1,286.50 an ounce as of Monday, 10.06am, still below the peak of $1,294.66 nearly a week ago (November 22).
The price of 24-karat gold stood at Dh156.25 per gram as of 10am, slightly down from a week earlier, while 22K, 21K and 18K were trading at Dh146.75, Dh140 and Dh120 per gram, respectively.
“As more institutional investors look to square off their books so as to ensure a profit before the end of the year, I expect gold prices to be under a little pressure, yet remain range-bound for this year between $1,250 and $1,300,” Karim Merchant, CEO and managing director of Pure Gold Jewellers, told Gulf News.
Gold buyers in the UAE have seen quite affordable jewellery pieces recently, especially over the past several weeks, as the precious metal has struggled to stage a major rally after falling below the key level of $1,300 an ounce. The last time prices soared so much was in October 16, when spot gold hit $1306.04 an ounce.
Last week, gold gained support from dovish minutes from the latest Federal Open Market Committee (FOMC) meeting, coupled with a stronger Japanese yen, but so far gold failed to break higher.
“During the past two months, the price has been averaging close to $1,280 an ounce, with support remaining firm despite several high volume selloff attempts and reductions in bullish hedge funds bets,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note.
“While Fed funds expectations for December 2018 has moved higher, ten-year real rates have traded within a relatively tight range. This goes to show that gold is more responsive to events further out on the US yield curve.”
“Gold has been steady in a narrow range between $1,265 and 1,305 [an ounce],” he said in a statement sent to Gulf News. “ “Gold should break out on either side of the range in the coming few weeks, which would then determine the closing price of gold for the year.”
“Gold is likely to remain range bound, with bias to the downside,” Century Financial Brokers added in a research note.