UAE: Gold recovers from a 4-week low hit on Monday evening

Analysts say nothing in the price action suggests gold's sell-off has reached its nadir

Reuters file
Reuters file

A Staff Reporter

Published: Tue 26 Apr 2022, 9:45 AM

Last updated: Tue 26 Apr 2022, 10:39 AM

Gold prices on Tuesday firmed above a near four-week low hit in the previous session, as lower US Treasury yields lifted prices and a slight retreat in the dollar offered support.

Spot gold was up 0.18 per cent at $1,903.16 per ounce as of 9.15 am UAE time.

In the UAE, the Dubai Gold and Jewellery Group data showed 24K opening at Dh230.75 per gram on Tuesday morning as compared to Dh230.0 at the close of the markets on Monday.

Among the other variants of the precious metal, 22K opened at Dh216.75, 21K at Dh206.75 and 18K at Dh177.25.

Jeffrey Halley, senior market analyst at Oanda, said the timid relief rally has spread to gold markets in Asia today.

“Nothing in the price action suggests gold's sell-off has reached its nadir, the price action suggesting just the opposite. The speculative longs, disappointed with a failure to break through $2,000 remain at risk of more losses still... Gold has support at $1,891.50 and $1,880 an ounce. Failure of $1,880 signals a capitulation trade targeting triangle support at $1,835, and then $1,800 an ounce. On the topside, gold has resistance at $1,915, $1,940, $1,980, and $2,000 an ounce,” he said.

Halley believes option-related selling at $2,000 will be a strong barrier as evidenced by the price action last week. But ahead of that, gold still has a huge amount of wood to chop and probably needs some good news to come out of China.

Naeem Aslam, chief market analyst at Ava Trade, said the precious metal is somewhat recovering its losses today.

“Still, the upward price trend remains under a significant threat, and this is because the dollar index is maintaining its strength which is hurting the gold price,” he said.

He said it’s pretty much given that the Fed will increase the interest rate by 50 basis points during their next meeting, but investors’ biggest worry is that the subsequent rate hikes could be even greater.

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