Gold price makes sudden spike after $100 drop - what next for 'safe-haven' asset?
Gold is up $25 an ounce since the plunge, with UAE gold rate now at Dh300/gm for 22K
Dubai: Are gold prices turning extremely volatile all over again?
Just 48 hours after dropping by over $100, gold is pushing its way back, gaining $25 to $2,695 an ounce by 07:45am on Friday. In between, the asset had briefly shot back to current levels.
The UAE gold rate is now at Dh302 for a gram of 22K, after dropping below Dh300 on November 6 when the votes for the US Presidential election showed Donald Trump heading for a historic comeback win. The dollar was inching higher and such occasions are always a drag on high gold prices. (Click here to check the latest gold and remittance rates in UAE.)
The highest UAE gold rate for 22K is Dh311.25 a gram, which was as recently as on October 30.
By 10:45am, gold was in retreat again, to $2,687 levels.
Yesterday (November 7), gold prices took quite a slide, dropping as much as $80 to $2,660. It was forecast that gold would slip further to $2,600 levels shortly before heading higher.
Today’s bounce back thus comes as a bit of a surprise. The last thing that shoppers need to see is such volatility on gold prices. Stability is what they seek when it comes to their gold buying decisions, and this week they have had very little of it.
Market watchers say today's gains for gold could be a reaction to the US Federal Reserve interest rate cut by 0.25 per cent and what it has suggested as more to come in the months ahead.
For UAE gold shoppers, it means more uncertainty into when gold prices will settle down, whether at a higher or slightly lower level. There aren't too many expecting gold to slip to $2,400 an ounce levels, but 'even $2,500 would be good' ahead of holiday sales buying in December.