Dubai: Gold has yet to recover its losses last week as concerns are high that the United States Federal Reserve will go ahead with an interest rate increase before the end of the year.
As of Monday morning, retail prices in Dubai remained steady at Dh137.75 per gram for 24-carat gold, Dh131 for 22K, Dh125.50 for 21K and Dh108.75 for 18K.
After dropping 0.7 per cent last week, spot gold stood at $1,145.10 an ounce by 0346 GMT, Monday, according to a Reuters report. The precious metal posted a decline after Federal Reserve chair Janet Yellen announced in her speech that the US central bank would start increasing the rates this year.
The precious metal had recently posted some gains following the announcement of the Federal Reserve that it has put on hold the interest rate increase.
However, gold’s shine quickly faded after the US dollar strengthened and the Federal Open Market Committee (FOMC) members later said that a rate hike this year is still likely.
“FOMC members have clearly expressed that a lift-off this year remains likely. This has given a boost to the US dollar. Unsurprisingly, gold and silver prices have also moved lower,” ABN Amro said in its latest research note.
ABN Amro has predicted that the price of gold will further decline to $1,025 an ounce in the last quarter of the year. By December 2016, the bank forecast the bullion to trade as low as $800 an ounce.
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