Dubai: Gold’s retail prices in Dubai have hit a new high as the bullion rallied anew amid geopolitical issues and uncertainty over the economic impact of Donald Trump's policies this year.
Jewellery rates registered an increase of as much as Dh12.75 per gram since the beginning of the year, with the 24-karat gold retailing at Dh152.25 as of 8am on Sunday, down 9.1 per cent from Dh139.50 in January 1.
The bullion broke to its highest level in more than three months on Friday while the US dollar dropped to its weakest in one week. Spot gold rose to its strongest level at $1,260.03 an ounce on Friday before closing at $1,257, up from $1,223.50 in November 11.
Analysts are now expecting the precious metal to extend its gains and reach higher to about $1,300 over the next few weeks. The support is likely to come from uncertainty surrounding the policies of Donald Trump and the upcoming French elections, as well as the Greek debt crisis.
US Treasury Secretary Steven Mnuchin had suggested on Thursday that Trump’s policies could have limited impact this year on stimulating the economy.
Ole Hansen, head of commodity strategy at Saxo Bank, said that gold has retraced more than half of the July to December selloff, thanks to the “unwinding of the post-election Donald Trump trade” that has sent the US dollar and bond yields sliding.
“We maintain a bullish bias and see the next target for gold at $1,278 an ounce. Only a break back below $1,220 an ounce would force us to turn back to neutral,” Hansen said in his latest note.
The latest Kitco survey showed that majority of the Wall Street professionals and Main Street investors, 65 per cent and 68 per cent, respectively, are expecting the precious metal to trade higher this week.
The upcoming Federal Open Market Committee (FOMC) meeting in March, is yet another factor to watch out for.
“All eyes are now on the outcome of Fed’s latest meeting to see what will be the direction on interest rate hikes. Overall, it seems like there is room for gold prices to increase further,” Karim Merchant, CEO and managing director of Pure Gold Jewellers, told Gulf News.
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.