Gold prices in UAE likely to increase
There are expectations that the gold rally will persist after increasing by almost 21% this year, with predictions indicating that the price of gold will reach $3,000 per ounce in the near future.
The valuable metal has surged in value this year primarily due to the anticipation of the US Federal Reserve reducing interest rates for the first time in a long time, a weak US dollar, and geopolitical tensions in the Middle East.
In the future, analysts predict that decreasing interest rates, geopolitical tensions, and increased demand from central banks will cause the prices of gold to increase.
Gold is currently in the advancing phase and has gained 23 percent since breaking out in late February 2024. In the year 2019, gold experienced a comparable breakout and increased by 50 percent in just 14 months. Rashad Hajiyev, founder of RM Capital Consulting, stated that the current rally still has plenty of potential with his goal being at least $3,000 per ounce.
The weekend saw the yellow metal finish trading at a price of $2,503.34 per ounce. It peaked over $2,525 earlier during the week.
In Dubai, the prices of 24K, 22K, 21K and 18K were Dh303.25, Dh280.75, Dh271.75 and Dh233 per gram, respectively.
Alex Kuptsikevich, a senior market analyst at FxPro, commented that gold reached a resistance level at $2,525 per ounce on the spot market last Friday, a barrier it has been struggling with for the last two weeks. A sequence of decreasing pullbacks and increasing rallies towards the resistance point highlights strong purchasing momentum.
Kuptsikevich stated that given these circumstances, we can anticipate a rise to the previous peak levels shortly, but it will be crucial to monitor the price action that follows.
He mentioned that in the last two weeks, a pattern has emerged on the gold chart showing a triangle of horizontal resistance and rising support. This signals that buyers are becoming more active at higher levels. The same outcome is reached when analyzing the elongated chart period starting from April, during which the trend of shallower corrections persisted. The current consolidation has been fluctuating near the uptrend's upper boundary.
He explained that there is evidence of upward exhaustion in the daily timeframe. Nevertheless, we witnessed a comparable scenario between October 2023 and February 2024, but instead of a brief upward trend, it was succeeded by a robust uptrend.
Vijay Valecha, the top investment official at Century Financial, has predicted that the price of gold could reach between $2,700 and $3,000 in the coming months, equivalent to Dh330-Dh365 per gram in the UAE.
Mazen Salhab, the main market strategist for Mena at BDSwiss, pointed out that the latest data showed a small drop in US weekly jobless claims, potentially benefiting gold.
Nonetheless, the US economy showed stability as the GDP growth for the second quarter was adjusted to 3 per cent. This change has propped up the value of the US dollar and treasury yields, somewhat restricting gold's ability to increase further.
Furthermore, Salhab predicted that persistent geopolitical risks and strong demand from China will still bolster gold.
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