Dubai: Gold’s weakness will continue over next few days, with prices expected to fall to as low as $1,000 an ounce before the end of the year.
Analysts said that strong expectations of a Federal Reserve interest rate increase this December will continue to put the precious metal under pressure.
“Our above-consensus Fed call should push gold prices towards $1,000 per ounce this year and $900 per ounce in 2016 mainly because of investor position liquidation,” said ABN Amro in its latest analysis.
Kitco’s latest survey also showed that the majority of retail investors remain negative on gold, with 56 per cent expecting the yellow metal to move lower in the short term. Only about 31 per cent of the participants in the survey said they believe the prices will go up, while 13 per cent remain neutral.
The precious metal was trading at $1,082.30 an ounce at 2.13pm EST on Thursday, down 0.2 per cent from a day earlier.
In Dubai, 24-carat gold was retailing at Dh130.50 per gram as of 2.30pm, down by about Dh1 from Tuesday’s street rates. The price for 22-carat gold was pegged at Dh123.75, while 21K and 18K retailed at Dh118.25 and Dh101.50, respectively.
Retail gold prices in Dubai had earlier dropped by about Dh10 per gram in a matter of more than two weeks following the release of October employment data in the United States.
The US economy added 271,000 jobs in the non-farm sector last October, particularly in professional and business services, health care, retail trade, construction, food services and drinking places, according to the Bureau of Labour Statistics.
The positive employment report caused the US dollar to rise and boosted speculations that the Federal Reserve has more reasons to increase interest rates in December.
