UAE: 24K gold price soars to Dh227 per gram, will it gain further?
The precious metal remains well supported as US inflation continues to beat expectations
Gold prices jumped nearly two dirhams per gram in the UAE on Thursday morning in line with the increase in global rates.
Globally, the precious metal prices soared 0.24 per cent to $1,874.35 per ounce at 9.25 am UAE time.
In the UAE, the 24K price rose to Dh227.0 per gram at the opening of the market, up Dh1.75 per gram. The other variants of yellow metal also gained in the morning as 22K, 21K and 18K opened at Dh213.25, Dh203.5 and Dh174.5 per gram, respectively.
Craig Erlam, senior market analyst at Oanda, said gold remains well supported as US inflation continues to beat expectations.
"The yellow metal continues to be supported by rapidly rising inflation even as markets price in more and more rate hikes from central banks. Another above-consensus reading from the UK this morning shows the trend is not improving as we near the peak over the next couple of months. Gold could remain well supported for a while yet," added Erlam.
"Gold has been range-bound between $1,845 and $1,880, and should remain here until either geopolitical tensions have eased a little, or the US Federal Reserve commits to show that they are really still looking to remove liquidity and raise interest rates faster," Brian Lan, managing director at dealer GoldSilver Central, told Reuters.
However, with high inflation, "even if they raise interest rates, real interest rates will still be largely negative," Lan cautioned. Hence, after an initial knee-jerk reaction to a hike, investors will realise that "gold is still a good asset to hold in this environment."