Women look at gold jewellery in a shop in Cairo. Gold prices in Egypt have surged taking it to 460 pounds per gram. Image Credit: Reuters

Dubai: The price of gold inched up slightly on Wednesday as the US dollar weakened, but that doesn’t mean today’s the worse time to hit the jewellery shops.

The latest gold jewellery rates in Dubai are still lower compared to the previous weeks, and shoppers can expect some declines over the next few days, just before a committee of the US Federal Reserve meets again next week.

Analysts said the bullion isn’t at its strongest at the moment and that prices tend to decline ahead of the Federal Reserve meeting and go back up afterwards.

Spot gold went up 0.3 per cent at $1,298.98 an ounce at 0635 GMT, according to Reuters. However, a quick look at the rates would show that there are still bargains to be had for the avid gold fans in UAE.

As of 12.30pm, 24-karat gold was trading at Dh157 per gram, cheaper by Dh5 from a high of Dh162 last April 3. Other jewellery pieces, such as 22K, 21K and 18K were also trading lower at Dh147.50, Dh140.75 and Dh120.50, respectively.

According to Ole Hansen, head of commodity strategy at Saxo Bank, the precious metal and other commodities have traded lower in the past week and reports of higher oil production did very little to strengthen the bullion’s position.

Hansen also noted that the Federal Open Market Committee (FOMC) of the US Federal Reserve might again raise the interest rates, as the US released strong monthly employment data for April, and this could be a dampener for the precious metal. The committee is expected to meet on June 13.

“On most previous occasions during this present rate hike cycle, gold has tended to weaken ahead of FOMC meetings, only to rally strongly afterwards,” Hansen said.

Vijay Valecha of Century Financial attributed gold’s latest increase to a weaker US dollar.

“Technically, prices bounced back from near the support level of $1285, and faced resistance near the psychological level of $1,300. Prices remained trapped between 200 – day moving average at $1,307 and the medium-term support trend line at $1,285,” Valecha told Gulf News.

“A move outside this range will give a clear direction for further move. However, the RSI (14) momentum indicator on the daily chart remains supported for a bullish move.”

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