Russia-Ukraine crisis: Fed to dictate gold prices in coming week

Russia-Ukraine crisis will continue to dictate the gold price in the coming week and the 24K price could hit Dh240 per gram in the UAE if the conflict escalates further.

Analysts say that gold investors will also keep an eye on the US Federal Reserve’s views about inflation because higher readings will ratchet up pressure on the American central bank to hike interest rates faster.

Globally, gold closed at $1,889.18 per ounce this week. Prices slipped on Friday, but analysts said the drop is premature and the decline is a temporary correction because there is a risk of further escalation in the military conflict.

In the UAE, 24K closed the week at Dh228.75 per gram, 22K at Dh215, 21K at Dh205 and 18K at Dh175.75.

The US and European countries imposed sanctions against Russia after Moscow launched a military attack against Ukraine. The EU foreign ministers will meet again on Sunday to beef up its military support and toughen sanctions on Russia.

“The markets seem to have viewed the sanctions imposed by the US as pretty tame. The metal’s fate will depend on the developments between Russia and Ukraine. Investors will also watch out for the Fed’s favoured inflation reading Core PCE. Higher reading will ratchet up pressure on the Fed to hike rates faster,” said Vijay Valecha, chief investment officer at Century Financial.

waheedabbas@khaleejtimes.com