UAE: Gold prices steady in Dubai, analysts see it drop to $1,800

Gold prices were steady in the UAE at the opening of the markets on the first trading day of the week.

Dubai Jewellery Group data showed 24K trading at Dh229.25 per gram on Monday morning, up Dh0.25 from last week. While 22K, 21K and 18K opened at Dh212.25, Dh205.5 and Dh176.0 per gram, respectively, at 9 am UAE time.

Spot gold was flat at $1,889.52 per ounce by 9.10am UAE time.

The precious metal prices declined in the previous five sessions, as investors saddled up for central bankers’ gathering this week, for an outlook on the economy and interest rates.

Daniel Dubrovsky, contributing senior strategist, dailyFX, said gold prices were particularly hit hard as Treasury yields on the longer-term spectrum soared. This was likely due to financial markets pricing in a higher terminal rate from the Federal Reserve amid still-solid economic data.

Alex Kuptsikevich, senior market analyst at the FxPro, sees the ultimate downside target for the yellow metal looks to be the $1,800 area.

“Gold's sharp decline began a month ago when the bears once again prevented the metal from consolidating above $1,980, a critical resistance level since May. On the way down in August, gold first broke below the 50-day moving average and then two days ago below the 200-day moving average. Both curves act as medium and long-term trend indicators. Gold failed to rally higher after a drop below the 50-day MA, but the failure only intensified the sell-off,” said Kuptsikevich.

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