Dubai: Gold fans in Dubai may find some bargains if they shop today, with the bullion recently losing some of its early gains. However, the long-term outlook points to higher prices.
As of Thursday, 0950 GMT, spot gold declined 0.1 per cent at $1,247.26 an ounce despite a weak US dollar. “Gold is caught between the weaker dollar and higher yields,” UBS analyst Joni Teves was quoted by Reuters as saying.
In Dubai, 24K gold was retailing at Dh151.50 per gram, down by Dh5 from Dh156.50 last June 7. The bullion had earlier taken a beating this week, with prices falling to $1,238 an ounce.
An analyst at ABN Amro indicated that, despite the current volatility, there is a likelihood that the bullion will continue to gain more value over the long term.
“This week, gold prices experienced an aggressive short-lived sell-off,” wrote Georgette Boele, coordinator FX and precious metals strategy at ABN Amro.
“[But] despite the aggressive selling pressure, gold prices managed to stay above the 200-day moving average. This by itself is a positive signal, as the long-term trend continues to point to higher prices.”
According to ABN Amro’s analysis, the bullion’s price will average at $1,250 in the second quarter but will gradually increase to $1,263 in September and end the year at $1,288 an ounce. By next year, prices are forecast to move higher and average at $1,400 an ounce by December 2018.
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