Dubai: Gold prices slipped on Tuesday, and is expected to drop further still as more rate hikes loom, commodity analysts evaluate. This is why investors and buyers are both in wait-and-watch mode for now.
In the UAE, the cost of 24-karat gold dipped to Dh202.25 per gram on Monday. Meanwhile, the price of 22-karat gold slipped to Dh190 per gram, 21-karat to Dh181.25 and 18-karat to Dh155.5 in the UAE. Check the latest gold rates here.
Analyts evaluated how gold prices have been a little disappointing for investors last week given the dollar moving lower - which was widely expected to head towards $1,700 in the past few days. Globally, spot gold price was at $1,670 per ounce, and down 10 per cent for the year so far.
However, gold prices globally have currently hit resistance around $1,680, potentially spurring some wait-and-see for a greater catalyst to induce an upward break, noted IG market strategist Yeap Jun Rong.
With analysts pinning their expectations on another hefty rate hike from the US soon, the upcoming inflation data this week will give gold buyers and investors more hints on how prices will move in the coming months.
"Further evidence of persistently elevated US inflation that heralds more incoming US rate hikes is likely to unwind some of gold's recent gains," said Han Tan, chief market analyst at Exinity.
The yellow metal is considered a hedge against inflation but remains highly sensitive to rising rates in the world's largest economy, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar.
- with inputs from Agencies