Dubai: Gold prices up, seen rising above $1,850 by 2021-end

Dubai - The precious metal entices investors to use it as a hedge against economic uncertainty and rising inflation.

Gold prices in Dubai rose on Tuesday morning in line with global rates as US dollar weakened ahead of the US inflation data.

Spot gold rose 0.15 per cent to $1,809.86 per ounce by 9.15am UAE time. In the UAE, 24K price increased from Dh218.5 per gram on Monday morning to Dh219.25 at the opening of the market on Tuesday. While 22K, 21K and 18K were trading at Dh206.0, Dh196.5 and D168.5 per gram on Tuesday.

Naeem Aslam, chief market analyst at London-based Ava Trade, said: "Looking at the current situation, traders do not want to sell gold due to growing concerns about the Delta variant. The precious metal entices investors to use it as a hedge against economic uncertainty and rising inflation."

“Covid-19 variant is forcing Southeast Asian countries into new lockdowns and this could very easily take place in Europe as well as restrictions continue to ease off. Moving forward, the price of gold is very likely to rise if investors believe that the US Fed is not concerned about inflation exceeding expectations and achieving full employment. Gold could be worth more than $1,850 by the end of 2021,” said Aslam.

Investors will also closely watch for the US inflation report which is due today evening. The report will reflect more light on the Fed’s timeline for tightening its policy stance.

Later, the investor focus will shift to Fed Chairman Jerome Powell’s testimony before Congress on Wednesday and Thursday for his response to the inflation data.

-waheedabbas@khaleejtimes.com

• Gold and Forex