Dubai: 24K gold hits Dh220, likely to hit Dh228 this week

Reuters

Dubai - US Federal Reserve chairman Jerome Powell signals to taper this year

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by

Waheed Abbas

Published: Sun 29 Aug 2021, 9:15 AM

Gold rallies will likely be capped as the US Federal Reserve chairman Jerome Powell signalled to taper this year and not next, say analysts.

The precious metal closed the week at $1,817.92 an ounce, up 1.35 per cent on Friday. In the UAE, 24K closed at Dh220.0 per gram. Among the other variants of the precious metal, 22K closed at Dh206.75, 21K at Dh197.25 and 18K at Dh169.0.

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The metal steered through the 100 and 200-day moving average resistance near $1,810 last week as Powell delivered what the markets wanted to hear, says Vijay Valecha, chief investment officer at Century Financial.

"Contrary to a long list of his hawkish colleagues who wanted to start tapering soon, Powell refrained from committing on the precise timing of the Fed's bond tapering. Although he said he sees the potential for the Federal Reserve to taper its purchases this year, he cautioned that this should not be interpreted as a sign that rate hikes would follow soon.

"For now, the precious metal has reasons to be cheerful as the Fed remains committed to printing dollars and keeping the interest rates low. If the metal clears above $1,830 resistance area, it could open doors to $1,850-70 zone followed by $1,900 psychological mark. Nonetheless, from a long-term perspective, gold rallies will likely be capped as the Fed has signalled about tapering this year and not next. In UAE, 24k gold price is likely to trade between Dh217 and Dh228 this week," added Valecha.

"Gold is making another attempt to overcome a three-month resistance. Let's see if gold will be able to legitimately break out and hold gains this time," said Rashad Hajiyev, founder of RM Capital Consulting.

He sees the gold price looking constructive and likely to reach $1,830-35 over the coming days.

-waheedabbas@khaleejtimes.com

Waheed Abbas

Published: Sun 29 Aug 2021, 9:15 AM

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