Dubai: Gold prices rise, 24K gains Dh1 per gram

Dubai - Spot gold was trading at $1,798.09 per ounce at 9.37 am UAE time.

Gold prices in Dubai rose on Monday morning as 24K gained one dirham per gram at the opening of the market due to depreciation in the US dollar.

The Dubai Gold and Jewellery Group data showed 24K price rising to Dh218.0 per gram on Monday morning as compared to Dh217 on Sunday. While prices of 22K, 21K and 18K surged to Dh204.75, Dh195.5 and Dh167.5 per gram, respectively.

Spot gold was trading at $1,798.09 per ounce at 9.37 am UAE time, up by 0.21 per cent.

Jeffrey Halley senior market analyst for the Asia Pacific at OANDA, said a rise through $1,835 an ounce could swing gold’s outlook back to positive, targeting a move back above $2,000 an ounce.

“There is no doubt the shorter-term technical picture looks bullish though, especially as gold has now closed and remained above the 100 and 200-day moving averages at $1,791.00 and $1,793.85 an ounce. A daily close above this zone tonight should signal more gains,” he said.

“Gold has support at $1,780 an ounce. Resistance appears initially at the overnight high around $1,814.00 before gold faces a formidable zone of multi-month daily highs between $1,832 and $1,835 an ounce.”

Naeem Aslam, chief market analyst at the London-based AVA Trade, said the depreciation of the US dollar has provided some support for the precious metal, pushing gold prices higher.

“However, the surge in gold prices is unlikely to continue as the US Federal Reserve begins to wind down its stimulus programme and treasury yields rise. Although the yellow metal is viewed as a hedge against inflation, and inflation is expected to rise until the second half of 2021, the expectation of an interest rate hike by the end of 2022 limits any significant gains. Rising interest rates raise the opportunity cost of holding gold, making it less appealing to investors,” he said.

The precious metal rallied to its highest since early September on Friday before trimming gains on US Federal Reserve Chairman Jerome Powell's comments on tapering. Gold cut gains after Powell's comment that inflation could ease next year and the central bank was on track to start tapering its stimulus. Powell said it was not time for the Fed to raise interest rates, especially given employment was still low.

US Treasury Secretary Janet Yellen said on Sunday the United States was not losing control of inflation, and inflation could return to normal by the second half of next year.

waheedabbas@khaleejtimes.com

• Dubai