Dubai: After incurring losses for four straight days, gold started to gain some ground on Thursday morning but later retracted at day's close.

Analysts expect prices to tumble further, especially since the United States Federal Reserve has given indications of another rate increase.

Spot prices are expected to hit $1,050 an ounce by the end of March and fall further to $900 by December this year.

“Gold price continues to be volatile since the beginning of the year. We have seen it rise in the beginning of the month and then fall this week, and up again. The price rise shows investor faith in gold as a safe haven during political and economic uncertainty,” Karim Merchant, CEO of Pure Gold Jewellers, told Gulf News on Thursday.

“However, the safe-haven rally is expected to be short-lived. Prices are expected to fall again based on Fed’s moves to raise interests in the current quarter.”

As of Thursday morning, the price of the precious metal rose by 3 per cent compared to December 31st, with the 24-carat gold retailing in Dubai at Dh131.75 per gram, up by Dh1.25 (.95 per cent) from January 13th and Dh3.75 (2.9 per cent) from December 31st. By 6pm, however, 24K dropped to Dh130.75.

Spot gold was down 0.5 per cent at $1,087.41 an ounce at 1249 GMT, according to Reuters.

Gold’s early trade rise coincided with the fall in Asian shares and decline in the US dollar. Stocks in Asia plunged on Thursday, while the price of oil hovered at 12-year lows. The European currency, on the other hand, rose against the weakening greenback.

Gold had started the year on a positive note, increasing by 2.5 per cent in the first trading days of 2016.  Prices later dropped by nearly 2 per cent in four consecutive days.

ABN Amro, in its analysis published on Tuesday, said it had revised its gold forecast, saying that the metal will likely trade at $1,050 an ounce by the end of March 2016.

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