Dubai: Gold’s retail prices in Dubai edged lower on Monday as the bullion failed to sustain its rally on Thursday and Friday, dropping slightly by 0.6 per cent to $1,153.20 an ounce.
Analysts, however, are forecasting the precious metal to go back up and hit $1,200 as investors turn to safe haven asset classes over the slowdown in China.
Stocks in China plunged nine per cent on Monday, fueling fears that the weakness will drag other economies down. There’s also a sense of panic gripping the global financial markets, with several indices, including those of Dubai, Abu Dhabi, Germany, Taiwan and Tokyo sliding 5.8 per cent, 0.28 per cent, 3 per cent, 4.8 per cent, and 4.6 per cent respectively.
Retail gold prices in Dubai slipped to Dh140 per gram from 140.25 for 24K as of 11am Monday. The price for 22K gold was down from Dh133.25 on Sunday to Dh133, while 21K dropped from Dh127.75 to Dh127.50.
Analysts said the downturn in China are prompting investors to seek refuge in other assets, such as gold.
"Certainly gold is finding itself a bit of a safe-haven bid with all the volatility that's going on in markets," Victor Thianpiriya, commodity strategist at ANZ Bank, told Reuters. "If things do get a lot worse then gold will certainly go a lot higher."
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