Dubai: UAE consumers looking to buy a new piece of jewellery at Dubai’s gold souks today will have to set aside more budget, as the precious metal regained some of its shine on Monday on the back of a weak US dollar.
The price of 24-karat (24k) went up to Dh152.50 per gram as of 10.21am and is expected to rise further and peak at Dh154 per gram this week, so jewellery buyers who hold off purchases today will have to spend Dh1.50 more per gram later.
The yellow metal was trading at $1,258.61 an ounce as of 7.53am, posting a 0.4 per cent increase. This has something to do with the decline in the American currency, which fell to its lowest point since mid-June.
“Gold prices have taken a very strong support from the lowest point of this year in the past few weeks. With the unexpectedly bad unemployment rate and average hourly earnings in the US, we should see the dollar to weaken further,” Vijay Valecha of Century Financial told Gulf News.
“Gold prices are at a hidden divergence on the RSI indicator and this could push prices up till Dh154 per gram of 24K gold in this week.”
However, buyers can expect prices to dip again over the next few weeks, with other analysts forecasting prices to average around $1,225 an ounce in September, about $33 cheaper than today’s rate.
In her latest analysis, Georgette Boele, co-ordinator for foreign exchange and precious metals strategy at ABN Amro, said the US dollar is likely to rally again on strong economic data and ongoing interest rate adjustments by the US Federal Reserve.
“Trade tensions between the US and China will probably linger on and there may be more volatility in the Chinese yuan in the near term. These are also negatives for precious metal prices,” Boele noted.
According to the revised price forecast, the bullion is likely to average $1,225 an ounce in September.
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