Dubai: Will gold price hit $1,850 this week?

Dubai - 24K price likely to trade between Dh216 and Dh228 this week

Gold prices can rise to $1,850-70 an ounce if it sustains a break above $1,830 following disappointing US jobs data and the continued weakness of the dollar, say analysts.

The precious metal edged higher on the last day of the week to close at $1,827.46 an ounce nearly one per cent. In the UAE, the Dubai Gold and Jewellery Group data showed 24K trading at Dh221.5 per gram, 22K at Dh208.0, 21K at Dh198.5 and 18K at Dh170.

The rate of new jobs being added to the US economy slowed to 235,000 for August, much below expectations of 750,000. The August data was also disappointing when compared to June and July figures of 962,000 and 1,053,000, respectively.

“Disappointing US jobs data abated investors’ fears of any early taper and exerted further pressure on the already weak dollar thereby further supported the dollar-denominated metal. Nonetheless, from long term perspective, gold rallies will likely be capped as the US Federal Reserve has signalled it would pull back its stimulus later this year,” said Vijay Valecha, chief investment officer at Century Financial.

However, if gold can give a sustained break above $1,830, it’ll see the next resistance near $1,850-70 region. On the downside, support for the metal is seen near $1,780-$1,800. In UAE, 24K gold price is likely to trade between Dh216 and Dh228 in days ahead, added Valecha.

Richard Snow, analyst at DailyFX, said the precious metal could very likely continue the long-term uptrend but needs to clear the $1,830 mark which would likely be made possible from a continued decline in the dollar.

“However, the risk to this outlook remains that should the market anticipate a greater possibility of tapering in the build-up to the September 22 address, this could very well play out via renewed dollar strength which places downward pressure on gold prices,” he added.

-waheedabbas@khaleejtimes.com

• Dubai