Dubai: Retail gold prices in Dubai have increased by as much as 5.4 per cent per gram since the beginning of the month, thanks in part to negative sentiment on latest US employment data.

The bullion last week emerged as the strongest performing precious metal due to weak US dollar and labour data, and lower expectations on interest rate increase.

As of Sunday, August 18, 24-carat gold was retailing at Dh141.50 per gram in Dubai, up Dh7.25 compared to October 1.  During the same period, 22-carat gold rose from Dh127.75 to Dh 134.50, while 21K rose to Dh129 and 18K to Dh111.50.

Spot gold stood at $1,184.70 on New York closing time on Friday compared to $1,157.70 a week earlier.

Gold market investors are expecting the precious metal to post further gains this week. In the latest survey conducted by Kitco, 78 per cent of 288 retail investors said they are optimistic on the bullion’s performance this week, while only 16 per cent are bearish and 6 per cent are neutral.

Among market professionals, however, fewer (57 per cent) are betting on gold’s rally to continue, 29 per cent are bearish and 14 per cent are neutral.

Some analysts are not seeing any further price movements in favour of gold this week since the US Federal Reserve is not expected to hold any meeting or issue a statement that could impact the US dollar.

“I really don’t see much progress for gold in the coming week, given that there’ll be no meeting or minutes of the Fed that could really move the dollar,” Carlos Sanchez, director of commodities and asset management at New York’s CPM Group, was quoted by Reuters as saying.

In its latest analysis, ABN Amro attributed gold’s recent rise to the sentiment on the US dollar. The Dutch bank expects the greenback to remain under pressure in the near-term unless “US economic data surprise to the upside.” Should the US dollar, however, recover, the precious metal is expected to move back to $1,100 an ounce before the end of the year.

“It is unlikely that the risk-on environment will continue to support gold prices. The futures market has priced out a Fed rate hike this year while according to the options market, there still is small possibility,” the bank said.

“At some point in time, a Fed rate hike this year is completely priced out and this is the moment that the US dollar could start to recover also versus gold prices. In such an environment, resilient US data in constructive investor sentiment will likely be US dollar supportive and hence gold negative.”

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