Dubai: Gold prices have generally been on a downward trend, but analysts are currently evaluating how costs won't drop too much and will stay more or less stuck in their current range in the coming days.
In the UAE, the cost of 24-karat gold was at Dh219.25 per gram on Tuesday. Meanwhile, the price of 22-karat gold fell to Dh206 per gram, 21-karat to Dh196.75 and 18-karat to Dh168.5 in the UAE. Check the latest gold rates here.
The precious metal has fallen for the last three months on rising interest rates, but global spot rates are managing to hold above $1,800 an ounce amid fears of a recession that could boost its haven appeal.
In the last 12 months, the lowest gold rate in Dubai was on September 30, when it was at Dh197 a gram for 22-karat. In this period, prices have shot up to Dh220 after the start of the Russia-Ukraine conflict.
Prices will stay buoyed
In the coming week, prices will be buoyed by economic growth concerns, although an elevated US dollar and impending interest rate hikes kept gains in check. US gold futures - indicative of near-term prices - gained 0.6 per cent to $1,812.20.
With gold holding its ground at under $1,810 per ounce, buying apetite rose ahead of residents' holiday travel. Gold is seen as a safe store of value during times of economic crises, like a recession.
"While we are stuck in the $1,790 to $1,830 range, gold could be supported on recession worries and possibly the Federal Reserve softening their policy stance as the market pivots from inflation concerns," said Stephen Innes, managing partner at Swiss wealth manager SPI Asset Management.
Pressured by rate hikes?
Bullion has been pressured in the past few months by major central banks around the world moving to hike interest rates in their attempt to tame runaway inflation.
"Overall, gold's price action is still underwhelming, setting a series of lower daily highs over the past month, suggesting the downside remains the weaker path of travel," OANDA senior analyst Jeffrey Halley said.
The dollar hovered near a two-decade peak, and continued to chip away at demand for greenback-priced gold among buyers holding other currencies.
