Dubai: Gold may bounce back to $1,400 (Dh5,142) an ounce in the medium term, up 13 per cent from the current levels, though short-term investors need to be cautious, a senior official with Saxo Bank told Gulf News.
“Negative sentiment that we had in gold in the past few months, which was triggered by the continuous rally in dollar, has slowed down,” Ole S. Hansen, head of commodity strategy at Saxo Bank said.
“I prefer to be long on gold. People may want to re-consider their short positions especially after the Federal Reserve’s hawkish stance on interest rates. The biggest focus will be the dollar,” said Hansen.
Investors are likely to look at expectations of growth, interest rates and inflation to determine gold prices, according to Hansen.
Spot gold was trading at $1,290 an ounce on Monday, recovering 8 per cent from the low of $1,190 seen in December last year.
In the long term, $1,160-$1,180 will be area of support for gold, he said.
Hedge funds and money managers increased their bullish futures and option bets in gold in the week up to October 14 after eight consecutive weekly declines, the Commodity Futures Trading Commission said on Friday.
The world’s largest bullion-backed exchange traded fund, SPDR Gold Trust, has also been seen an uptick in investments. Its holdings rose 1.5 tonnes last week, its first weekly inflow since early September.
