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UAE: Gold prices inch towards Dh300 per gram
Globally, spot gold was trading at $2,463.45 per ounce, up by 0.7 per cent
Gold prices continued to rise in the UAE on Friday as global prices surged due to geopolitical tension in the Middle East and expectations about US Federal Reserve rate cuts.
In the UAE, the 24K variant of the precious metal rose half a dirham to Dh297.5 per gram on Friday morning while 22K, 21K and 18K were selling for Dh275.5, Dh266.5 and Dh228.5 per gram, respectively.
Globally, spot gold was trading at $2,463.45 per ounce, up 0.7 per cent.
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Vijay Valecha, CIO of Century Financial, earlier told Khaleej Times that forecasts suggest a promising trajectory for gold, with a potential target range of $2,700-$3,000, translating to Dh330-Dh365 in the upcoming months.
Chris Weston, head of research at Pepperstone, said the wind is to gold’s back and the market goes into US nonfarm payrolls long and strong and for good reason.
“Certainly, a weak US payrolls report, and notably if the unemployment rate ticks up to 4.2 per cent or above, will see US swaps pricing move even closer to a 50bp cut in September, in turn, taking US 2-year yield further lower, and taking gold to a new all-time high and ever closer to $2,500,” he said.
“This is not just a rates story though - with geopolitical headlines in the Middle East offering alternative tailwinds, it feels prudent to consider the possibility that an escalation of the news flow through the weekend puts gold as a primary hedge, protecting portfolios should we see gapping risk on the Monday open - hedges that are already moving higher and offer capital gains are the even more compelling,” said Weston.
Samer Hasn, market analyst at XS.com, said gold’s moves come after a sharper-than-expected contraction in US manufacturing activity and an unexpectedly sharp rise in initial jobless claims to the highest level in more than a year, which in turn reinforces the market hypothesis about multiple rate cuts this year.
“The rapidly escalating geopolitical tensions, with fears of a wider regional war in the Middle East, are also keeping gold on track to record further gains,” he said.
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