Dubai: After hitting record-high prices last week, gold jewellery in Dubai eased recently following a fall in the bullion due to Donald Trump’s renewed talk of tax cuts.
Most industry analysts are predicting the recent rally to continue this week, with some expecting the spot price not to go lower than $1,205 an ounce.
As of 4pm Sunday, 24-karat gold in Dubai was retailing at Dh149.50 an ounce, edging down by .75 fils per gram from Dh150.25 on Thursday.
The precious metal had nearly recovered half of its losses during the July to December selloff last week when it reached its highest price since November 11 at $1,244.67 an ounce. However, by Friday, the bullion dropped to 1,223.93 an ounce following the American president’s tax comments.
Trump had assured on Thursday that he will make an announcement over the next two or three weeks that will be “phenomenal in terms of tax.” The stock markets, as well as the US dollar, moved higher after the statement.
“[The statement] helped send stocks, dollar and bond yields higher, thereby revising some of the support that earlier in the week helped send gold to a year-to-date gain of more than 8 per cent,” said Ole Hansen of Saxo Bank.
“A correction was overdue after gold almost managed to recoup half of what had been lost during the [selloff]. Underlying demand has improved with hedge funds showing signs of returning. This after having cut net-long positions by 88 per cent from last July’s record up until early January.”
Hansen said gold’s price support will be between $1,220 and $1,205 an ounce.
According to Kitco’s latest survey among 1,844 respondents from Wall Street and Main Street, the majority are predicting gold to continue posting some gains this week.
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