Dubai: Gold jewellery prices in the UAE plummeted to their lowest level in two months on Wednesday amid reports of tax reforms in the United States.
Spot price had plunged on early trade to a little over $1,260 an ounce, the lowest since October 6, before slowly ticking back up to $1,269.30 an ounce by 2.34pm.
The latest drop has sent jewellery pieces falling significantly, providing gold fans another chance to snap up some bargains.
As of 2:30pm, 24-karat gold was trading at Dh153.50 per gram, dropping by Dh4.25 per gram from October 16.
The price of 22K also fell to Dh148.25 per gram, while 21K and 18K dropped to Dh141.50 and Dh121.25 per gram, respectively.
The move to overhaul the US tax code had prompted investors to move to other assets.
“Gold prices broke a very narrow and steady range, on the news of US tax reforms. Gold has broken major supports and looks further bearish in the coming weeks,” Devesh Mamtani, head of investments and advisory at Century Financial Brokers, told Gulf News.
“The decline in gold price is purely due to technical reason, market makers are influencing the price movement. Overall, I feel gold price will remain range bound,” added Karim Merchant group CEO and managing director of Pure Gold Jewellers.
Analysts are expecting the bullion to continue to face some headwinds as the market enters the new year.
"The macro-economic backdrop remains challenging for gold and as such, we see only limited upside to prices moving in 2018," said Michael Widmer, head of metals research at Bank of America Merrill Lynch.
"The US central bank is looking to further normalise monetary policy, which is so bearish for gold because inflation and inflation expectations have remained subdued," he added.
"A successful rejigging of the US tax code would also affect gold through growth and US dollar."
Gold Rate: To keep up to date with gold prices, go to our gold rate page.
Currency Rate: To keep up to date with latest exchange rates, go to our currencies page.
