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UAE latest gold rates: Bullion forecast to move higher this week

Global gold rate drops slightly on first trading day of week, but here's where bullion is headed over next few days

Image Credit: Zarina Fernandes/Gulf News
The global gold rate has dropped slightly from last week, but will the trend continue over next few days?

Dubai: The bullion edged down slightly on the first trading day of the week, although the majority of analysts are betting on gold to move higher over the next few days.

As of 10.26am, spot gold was trading as low as $1,252.50 an ounce, down by .02 per cent from Friday’s rate of $1,252.50 an ounce.

In Dubai, jewellery prices remain unchanged from the day before, with the 24-karat still retailing at Dh152 per gram and 22K selling at Dh142.75 per gram. The price of 21K and 18K stood at Dh136.25 and Dh116.75 per gram, respectively.

Gold fell to a four-month low just a little over a week ago, prompting a flurry of buying activity at retail shops. However, the bullion strengthened back up, following the decision of the US Federal Reserve to increase interest rates and it looks like the trend will continue over the next few days.

In a survey by Kitco, nearly seven in ten (68 per cent) of respondents in Wall Street and more than half (57 per cent) of market professional in Main Street said they expect gold to move higher this week.

According to Davis Hall, global head of foreign exchange and precious metals at Indosuez Wealth Management, the ongoing unpredictability of US President Donald Trump’s policies, coupled by the ever simmering geo-political uncertainty in the Korean peninsula are just some of the factors that are causing gold to rise despite the rate increase.

“It must be noted that gold typically underperforms when US interest rates rise, equities surge and volatility trends consistently lower,” he said. “However, gold has somewhat bucked this historic correlation due to other underlying factors.”

The precious metal has been trading in the $1,200 to $1,350 range for some time now. According to  to Ole Hansen, head of commodity  strategy at Saxo Bank, it is likely that the precious metal will stick to this range-bound trading behaviour into 2018, with the risk being skewed on the upsde.

“Growth concerns combined with the risk of rising inflation could swing the pendulum back in favor. Geo-risks both political and military remains elevated into 2018 and with that in mind investors are likely to maintain and potentially increase demand for safe-haven or tail-end risk protection via precious metals.”

Gold Rate: To keep up to date with gold prices, go to our gold rate page.

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