Gold in UAE: Price hits one-week low - time to buy as costs set to rise soon
UAE gold rate now at Dh192 for a gram of 22-karat; 24-karat at Dh204.25 per gram
Dubai: As gold prices hit a fresh weekly low on Monday, buyers are expected to take advantage of the comparatively low prices as the yellow metal is set to get pricier from here on out, analysts evaluate.
In the UAE, the cost of 24-karat gold was at Dh204.25 per gram on Monday. Meanwhile, the price of 22-karat gold fell to Dh192 per gram, 21-karat to Dh183.25 and 18-karat to Dh157 in the UAE. Check the latest gold rates here.
Will gold prices fall further?
Globally, spot gold price was down 0.5 per cent at $1,686.55 per ounce on Monday, after hitting its lowest since October 3. US gold futures - indicative of near-term price movements - were down 0.8 per cent at $1,695.70.
Gold prices have declined more than $350 since surging past the $2,000-mark in March, amid aggressive US monetary policy tightening.
Spot gold is expected to fall into a range of $1,660 to $1,674 per ounce, as it has more or less broken a support at $1,689, according to Reuters technical analyst Wang Tao. Such a move will be reflected in UAE prices as well.
Why are gold prices falling?
Gold prices fell as solid US jobs data boosted expectations that the Federal Reserve will continue to deliver oversized interest rate hikes in the world's largest economy, which has historically been detrimental for key economies elsehwere.
The dollar index was steady after touching a one-week high on Friday. A stronger greenback makes gold costlier for buyers holding other currencies.
"Gold prices are taking their cue from the build-up in rate-hike expectations from last week, brought on by the hotter-than-expected US job report," IG market strategist Yeap Jun Rong said, adding that gold prices seemed to remain locked in a downward trend for now.
World economy now resilient?
Data showed on Friday US job growth slowed moderately in September while the unemployment rate dropped, signalling a resilient economy and dousing hopes of a Fed pivot anytime soon.
Investors will now focus on the U.S. inflation data due later this week. Headline consumer price inflation is seen slowing a touch to an annual 8.1 per cent, but the core measure is forecast to accelerate to 6.5 per cent from 6.3 per cent.
While gold is often seen as a hedge against inflation, rising US interest rates increase the opportunity cost of holding the non-yielding gold.