Dubai: Gold prices in the UAE headed farther south on Thursday as the bullion continued to take a beating from a strong US dollar, thus providing more opportunities for jewellery fans to score some bargains.
The price of 24-karat (24K) gold dipped to Dh145.75 per gram as of 4:15pm, cheaper by 1.25 fils per gram from Tuesday’s closing rate.
Other jewellery pieces are likewise retailing at a more affordable rate, with 22K now priced at Dh136.75 per gram, 21K at Dh130.50 and 18K at Dh112 per gram.
Spot gold stood at $1,202.96 an ounce as of 1:55pm, down by 0.3 per cent, according to Reuters. US gold futures also shed 0.2 per cent to $1,209 an ounce.
"There is a steady stream of good news from United States economy and it is reducing the attractiveness of safe haven assets," according to Vijay Valecha of Century Financial.
"Core personal consumption expenditures (PCE) which is Fed’s preferred measure of inflation has hit the Central Bank’s 2 percent target for the first time since April, 2012. With US labor market near full employment level, this is indicative of inflationary pressure building up in the economy and Fed will be compelled to stay on the rate hike course."
Analysts, however, are expecting the precious metal to rebound in the coming weeks, providing more reason for gold fans not to hold off purchases any longer.
According to an analysis by Georgette Boele, co-ordinator FX and precious metals strategy at ABN Amro, it is time for gold to bottom out as there is limited upside in the American currency. She also cited a stabilization and some recovery in the Chinese yuan and cutting back of speculative net-longs.
“But a strong recovery/ rally will take time,” she noted. “We expect a recovery in gold, silver and platinum prices for the remainder of the year.”
“We expect precious metal prices to bottom out in the coming days and weeks for several reasons. For a start, we expect that Chinese authorities will try to avoid further sharp weakening of the yuan from current levels.”
“We even expect some recovery of the yuan before the end of 2018. This should support gold prices because the direction of the Chinese yuan versus the US dollar is one of the most crucial factors.”