Dubai: Gold jewellery fans in Dubai have more reason to cheer as retail prices dropped further on Wednesday on weaker safe-haven demand and stronger US dollar.
The bullion edged down on the same day, as investors await the minutes of the Federal Open Market Committee (FOMC) meeting in July which are due to be released later in the day.
The price of 24K in Dubai stood at Dh153.75 per gram by 3.52pm, down by .75 fils from Tuesday’s early trade and Dh2 from Monday.
Spot gold dropped 0.2 per cent to $1,269.11 per ounce by 0712 GMT after falling in two consecutive sessions, according to Reuters.
The minutes of the FOMC meeting are expected to be released in the United States at 2pm today (10pm, Dubai time). Details of the Fed’s discussions in July will provide indications on potential interest rate adjustments, which in turn can have an impact on gold prices.
Some analysts are forecasting gold to trade lower on the recovery of the greenback and positive economic data in the United States, coupled with the further easing of the United States and North Korea tensions, among others.
“We expect gold prices to move towards the lower border of the trading range ($1,200-$1,300) again in the coming weeks,” wrote Georgete Boele, coordinator FX and precious metals strategy at ABN Amro, this week.
“We expect the dollar to recover somewhat. Stronger-than-expected US data have started to have a positive impact on the US dollar again. The positioning of the US dollar in the futures market may be around neutral but positioning in other currencies such as the euro is extreme,” she added.
Boele said that some profit taking in the euro could help boost the US dollar, while the Federal Reserve is likely to “hike more than financial markets currently anticipate.”
“This will probably result in higher US nominal and real yields, weighing on gold and other precious metal prices. Furthermore, we don’t expect a full-blown crisis concerning North Korea. Therefore, safe-haven demand for gold and to a lesser extent silver and platinum will probably ease.”
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