Dubai: Gold eased slightly on Wednesday as the US dollar strengthened, but analysts are still betting on the precious metal to post further gains.
As of 1:26pm, 24-carat gold was trading at Dh151.75 per gram in Dubai, down from Dh152.50 a day earlier. The price of the yellow metal, however, has so far increased by Dh1.75 per gram since Sunday and Dh3 per gram since the end of last month, as safe-haven demand persists.
The price of gold, as well as other precious metals like silver, is sensitive to fluctuations in currency markets and discussions around the interest rate increase in the United States.
“[They] react more strongly to developments in the US dollar and expectations about the Fed rate cycle,” noted Georgette Boele, co-ordinator for foreign exchange and precious metals strategy at ABN Amro.
According to Ole Hansen, head of commodity strategy at Saxo Bank, lower expectations of US interest rate increase and other factors like the continued negative yields on high-quality sovereign bonds will continue to provide gold with support.
On Monday, the bullion showed renewed signs of strength in Asia, resulting in the price breaking the resistance at $1,245 a week earlier. “If gold manages to break above $1,155, I see no reason why it will not mount a renewed attack on the March high at $1,185,” Hansen told Gulf News.
Spot gold did jump to a three-week high of $1,262.60 on Tuesday, but pared some gains after the dollar strengthened, according to Reuters. By 0041 GMT on Wednesday, spot gold eased 0.1 per cent to $1,254.10 an ounce.
Gold and other precious metals have performed better than the greenback since the beginning of the year. The bullion has rallied by approximately 15 per cent, while platinum prices have increased by 6 per cent, according to ABN Amro.
Gold Rate: To keep up to date with gold prices, go to our gold rate page.
Currency Rate: To keep up to date with latest exchange rates, go to our currencies page.
