Dubai: After performing very strongly in the first quarter, gold is starting to ease off but prices remain relatively high compared to a few months ago.
There are also speculations that the buillion stil has some room to grow and prices could still breach the current level and hit $1,310 an ounce.
The precious metal on Wednesday inched down by 0.17 per cent from Tuesday’s closing price in Dubai. As of 2pm, 24-carat gold was trading at Dh149 per gram, down from Dh149.25 a day earlier, the latest prices posted by the Dubai Gold and Jewellery Group show.
Current retail prices are barely showing any significant gains so far compared to end of March. Players in the industry are apparently holding off for the outcome of Wednesday's meeting of the Federal Open Market Committee (FOMC).
Spot gold slipped 0.4 per cent to $1,226.40 an ounce as a result of profit-taking, but retained most of its 1.3-per cent gain from Tuesday, according to Reuters.
Some analysts are betting on the bullion to weaken and post price declines this year as safe-haven demand has started to ease more recently.
“Prices should trend sideways or slightly lower during the second quarter,” Carsten Menke, commodity analyst at Julius Baer, told Gulf News.
But for Saxo Bank, gold, among other commodities, is just showing signs of stabilisation following a selloff over the past couple of years.
“The buying of gold was almost non-stop during the first quarter with hedge funds going from record short to their biggest net-long positions in 13 months,” the bank said in a statement on Wednesday.
“Strong momentum should see gold bugs reach but not breach $1,310 an ounce.”
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