Gold prices in UAE: Will precious metal dip to $2,200 or hit $4,600? Experts reveal trend
Gold prices in Dubai have been rallying for the past few years but may not continue in the near future due to “accumulated overbought conditions.”
As such, that analyst suggests that it may be more likely to see prices decrease, rather than increase.
Over the past few months, the price of 24K in Dubai has been hovering around the Dh 400 mark and 22K is around Dh 375. “The tedious seesaw for gold is about to end,” he said, as the Chief Market Analyst at FxPro.
From a technical analysis standpoint, “this exhausting five-month sideways movement is likely to end in the coming weeks. The level of consolidation is typically in direct proportion to the strength of the breakout, so the stronger the breakout is, the more dramatic the movement will be. The more acute the price is, the better.”
As he continued, “I expect significant overselling, which may drive prices down as low as $3,000 or as high as $2,200 per ounce. And that's only the conservative estimations. In extreme bullish scenarios, with the Fed embracing full soft policies, we could be looking at an astonishing $4,600.”
As per the Dubai Jewellery Group's information, the 24K gold was trading at 405.5 dirhams per gram at the start of the markets on Monday, which is a decrease from 406.25 dirhams per gram at the close of markets over the weekend.
In the precious metal segment, the prices for 22K, 21K, and 18K dropped to Dh375.5, Dh360.25, and Dh308.75 per gram respectively.
Meanwhile, spot gold was trading at $3,364.76 per ounce, a decline of 0.23 percent.
Most expect the US Federal Reserve to ease monetary policy sometime in September. After that, they may choose to stay put for a while. Slow is the new fast, and that is bringing some interest in the currency. With the ongoing efforts of the US President to resolve the Ukraine conflict, the outlook for the precious metal is murky.
The initial conflict, coupled with the West's decision to freeze gold and foreign currency reserves of Russia, triggered gold prices to surge. From February 2022, gold’s price went up 170 percent, and in April, it reached over $3,500 per ounce. This surge was fueled by a shift away from the US dollar, aggressive gold purchases by central banks, and heightened interest in exchange-traded funds (ETFs),” he explained.
In the second quarter, he explained, the purchasing activity of central banks in the precious metals segment dropped sharply, and investments into niche exchange-traded funds slowed down their growth.
“In the absence of such factors, gold will not be able to recover the upward trend. Nevertheless, the US monetary policy easing, lower yields on US Treasuries, and the US dollar depreciation will in the medium term be supportive of gold,” he explained.
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