Dubai: It’s been a fairly quiet start to the week for gold, with local rates staying unchanged since Sunday, but jewellery fans who are eyeing new pieces are well advised to visit the shops soon.
An analyst based in Dubai said on Monday that gold is set to shine again, especially in the succeeding months of August and September.
The price of 24-karat (24K) gold is likely to jump by more than Dh4 per gram to reach Dh153.25 to Dh153.80 in August and range between Dh148 and Dh151 this week, according to Vijay Valecha, chief market analyst at Century Financial Brokers.
As of 10.01 am, local jewellery rates looked relativey steady, with 24K trading at Dh149.25 per gram. The cheapest option, 18K, retailed at Dh114.50 per gram, while 21K and 22K traded at Dh133.75 and Dh140.25, respectively.
“Gold looks to be forming a triangle pattern and until $1,195 an ounce is held, prices are set for a meaningful rally,” Valecha told Gulf News.
He said gold prices tend to go up in August and September, with the precious metal remaining positive 70 per cent of the time, based on historical prices in the last 30 years.
“Historically, August and September have been positive for gold prices and the probability of delivering a positive return is 70 per cent. In the UAE, the current 24K gold price is likely to move upwards towards Dh153.25 to Dh153.80 [until the end of August],” Valecha added.
After dropping significantly earlier last week, the price of gold increased on Friday as the US dollar took a beating following US President Donald Trump’s comments on the strength of the US dollar and interest rate increases by the US Federal Reserve.
Trump said on Twitter that China and the European Union “have been manipulating their currencies and interest rates lower.” After the tweet, the benchmark dollar index dropped.
China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field...— Donald J. Trump (@realDonaldTrump) July 20, 2018
“Gold prices settled higher Friday, chipping away some of its weekly loss, as comments from Trump on US interest rates and the dollar weighed heavily on the greenback,” said Valecha.
“Trump voiced his displeasure with Federal Reserve interest rate increased in a Thursday interview, prompting a decline in the benchmark dollar index, which again got pressured after he tweeted on Friday, accusing China and the European Union of manipulating their currencies and interest rates.”