Dubai: The days of cheaper gold rates for jewellery buyers in the UAE may probably end soon as the recent price correction, which saw the precious metal falling to $1,260 an ounce this month, is over.
The bullion looks set to revisit the previous high of $1,300 an ounce by the end of the year, with further rallies expected in the coming 2018, according to the latest analysis by ABN Amro, which regularly tracks commodity price performance.
“[The] gold price correction [is] behind us, look for higher prices,” the bank said in a research note.
The price of the yellow metal is forecast to climb further to $1,350 an ounce between January and March 2018, and end the year with a more positive performance, as rates are expected to average at $1,450 an ounce.
As of Sunday, however, gold jewellery rates in Dubai are still weak, with the 24-karat piece retailing at Dh154.25, cheaper by Dh6.25 per gram from the previous month’s peak. The price of 22K also stood at Dh145 per gram, while 21K and 18K traded at Dh138.25 and Dh118.50, respectively.
“The longer-term trend in gold prices is also positive, mainly because we are negative on the US dollar,” Georgette Boele, senior precious metals and diamond analyst at ABN Amro wrote.
“Our forecast for the end of 2018 is $1,450 per ounce.”
Gold’s rally this year came to a halt in September. The price weakness continued in the month that followed, with the rates falling from $1,357 an ounce to $1,260 on October 6 mainly due to “higher US nominal and US real yields,” according to Boele.
“Since then, the gold prices have stabilised. The gold price decline also stopped just above the 200-day moving average which is a positive signal.”
For this week, some price declines can be expected, with the majority of the experts in Wall Street (69 per cent) betting on gold to weaken, according to Kitco’s survey. However, most analysts in the Main Street (44 per cent) are optimistic that the precious metal will stay outside the negative territory.
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