Dubai: Gold has dropped below the buyer-averse international price of $1,900 (Dh6979), with 24-karat gold currently priced at Dh230.75. However, buyers are advised to buy any dip in prices, like the one currently seen, as experts foresee prices only rising in the weeks to come.
Choppy gold markets have been pushing prices back and forth these past weeks as buyers and investors have been waiting on some type of catalyst to get costs moving in one direction or the other.
Even as the prices inch back and forth, the precious metal was trading at its highest level in over four months. But why has the price been largely rising these past weeks?
Analysts from JPMorgan have been suggesting that that major investors are moving into gold as they ditch cryptocurrencies.
Amid China's efforts to efforts to crack down on bitcoin mining and trading, the cryptocurrency has been falling sharply – albeit at a slower rate currently. It is now down nearly 50 per cent from the year's high.
So the high volatility in cryptocurrencies has led to investors flocking back to gold for stability and the slide in cryptocurrencies has further lifted the safe-haven metal's appeal.
Other factors leading to an upward price rise are concerns relating to rising inflation in the US, the world’s largest economy, a weaker US dollar.
Gold prices have been largely on an upward move also due to uncertainties created by the second wave of COVID-19 cases. But what does this mean for prices in the short and long term?
Analysts are of the opinion that based on their risk profile investors should look at allocating 5 per cent to 15 per cent of their capital to gold as prices are seen staying up in the weeks to come. But analysts also add that potential buyers should look out for possible dip in prices to make profits, like the one that is currently witnessed.
So in short, take advantage of the current dip in prices, as prices are expected to rise further in the weeks to come.