Dubai: Gold prices near record high, set for weekly gains on Fed rate-cut boost

If favourable market conditions continue, prices could reach between $2,600 and $2,800 over the next 12 months, says expert

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By Reuters

Published: Fri 20 Sep 2024, 11:03 AM

Last updated: Fri 20 Sep 2024, 9:05 PM

Gold hovered near-record levels on Friday and was on track for a weekly gain after the US Federal Reserve's recent oversized interest rate reduction and on signs that further cuts were on the horizon.

In Dubai, the 24K variant of the yellow metal traded at Dh314 per gram on Friday morning. Other variants 22K, 21K and 18K are priced Dh290.75, Dh281.50, and Dh241.25, respectively.

Spot gold rose 0.3 per cent to $2,593.79 per ounce, as of 0539 GMT, up about 0.7 per cent for the week so far.

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Bullion rose to a record high of $2,599.92 on Wednesday after the Fed began its easing cycle with a half-percentage-point cut. The Fed also projected a further half-point reduction by year-end, a full point next year and an additional half-point trim in 2026.

"Current trends are very positive for gold, and if these favourable market conditions continue, prices could reach between $2,600 and $2,800 over the next 12 months," said Kyle Rodda, a financial market analyst at Capital.com.

Lower US interest rates and geopolitical uncertainty increase the bullion's appeal.

In the Middle East, Israeli warplanes late on Thursday carried out their most intense strikes on southern Lebanon in nearly a year of war, heightening the conflict between Israel and the armed group Hezbollah.

"Gold prices are expected to be well supported in the coming months due to a weaker U.S. dollar and lower bond yields, as well as against a backdrop of elevated geopolitical tensions," BMI said in a note.

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Reuters

Published: Fri 20 Sep 2024, 11:03 AM

Last updated: Fri 20 Sep 2024, 9:05 PM

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