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UAE: Gold prices plunge, likely to drop further
Dollar is king and the yellow metal has well and truly lost its shine after breaking below $1,800 last week
Gold prices neared a nine-month low on Tuesday, as the US dollar strengthened to its highest level in 20 years, stifling demand for greenback-priced bullion.
Spot gold was down 2.17 per cent at $1,726.69 per ounce at 9.19am UAE time.
In the UAE, gold prices fell more than one dirham per gram at the opening of the market on Tuesday. The 24K gold price fell to Dh209.5 per gram on Tuesday as compared to Monday’s close of Dh211.0 per gram. Among the other variants of the yellow metal, 22K opened at Dh196.75 per gram, 21K at Dh187.75 and 18K at Dh161.0.
Craig Erlam, senior market analyst, UK and EMEA, OANDA, said the dollar is king and gold has well and truly lost its shine after breaking below $1,800 last week.
“Don't get me wrong, we saw plenty of resilience in the run-up to it but the eventual breakout was explosive and it's still in a state of shock. It barely pared any of the losses before the selling pressure started to kick back in. With the dollar so heavily backed, there isn't much of a bullish case for gold currently, with $1,680-1,720 offering the next major test of support,” said Erlam.
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-waheedabbas@khaleejtimes.com
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In the previous session, the rupee had closed at 79.06 against the US dollar
Spot gold was up 0.3 per cent at $1,777.20 per ounce
It opened at 79.16 against the US dollar and touched 79.11 in initial deals
Spot gold was trading at $1,760.13 per ounce as of 9.10 am UAE time, down 0.15 per cent
Higher oil prices, month-end importer demand and global recession fears could restrict the gains for the rupee
Spot gold was up 0.2 per cent at $1,736.89 per ounce in early trade
The US central bank is widely expected to raise interest rates by another 75 basis points