Prices are estimated to rise on global economic worries and festival demand.
Now is the right time to buy gold as prices will appreciate in the coming months due to global economy concerns and strong demand ahead of the Indian festival of Diwali.
Market analysts expect the yellow metal prices to increase approximately five per cent in the next two months from Dh148.25 on Monday to over Dh155 by December for 24K gold.
The festival of Diwali will be marked on November 7.
Valecha said that since political tensions around Saudi Arabia are lingering and trade tension between China and the US is not abating, there is a good probability that safe haven demand for gold will be sustained. “Also, demand is expected to surge with the major Indian festival of Diwali only a few weeks away.”
Lukman Otunuga, research analyst at FXTM, also believes that gold has the potential to appreciate this quarter as trade disputes, Brexit-related uncertainty, Italy budget concerns and global growth fears fuel risk aversion.
“Technical trades will continue observing how prices behave around the $1,233.50-$1,213 [Dh4,527-Dh4,452] regions,” he said. The commodity was trading at Dh4,492 on Monday.
Otunuga, however, warned that a broadly stronger dollar remains a threat to upside gains.
Going forward, Otunuga believes gold is likely to be heavily influenced in the coming months by the dollar’s performance, US rate hike expectations, trade war fears and geopolitical tensions.
Alternatively, a broadly stronger dollar and prospects of higher US interest rates in 2019 could easily send the precious metal crashing. Investors will be closely observing if gold can push further away from the psychological $1,200 level, he added.
Century Financial’s Valecha believes uncertainties surrounding global trade, US monetary policy, the Italian budget, Brexit and the upcoming mid-term elections in the US will be the key factors driving gold price.