Buy Now: Dubai gold prices set to gain in short-term
Weak dollar, rising inflation to build a stronger case for further gains.
Gold prices gained in Dubai and worldwide on Wednesday morning, as the US dollar softened and a fall in US Treasury yields boosted the precious yellow metal.
Commodity analysts believe that low yields, weakness in the dollar and rising inflation would build a stronger case for further gains in the precious metal's prices in the short-term.
Spot gold was up 0.75 per cent or $13.31 an ounce to $1,783.98 per ounce by 9.45am UAE time on Wednesday.
Gold prices in Dubai also rose in line with global rates as 24K prices rose a dirham per gram to Dh215.75 on Wednesday morning, as compared to Dh214.75 on Tuesday.
Data from the Dubai Gold and Jewellery Group showed that 22K retail gold price also rose a dirham per gram to Dh202.75, while 21K and 18K prices jumped Dh0.75 to Dh193.25 and Dh165.75, respectively.
Ipek Ozkardeskaya, a senior analyst at Swissquote, said gold consolidated gains a touch below $1,800 per ounce.
“Subdued US yields, rising inflation expectations, combined with supportive trend and momentum indicators build a stronger case for a further upside in gold prices in the short run,” he said.
Naeem Aslam, chief market analyst at AVATrade, said a softer dollar and risk-averse attitude among investors are helping the gold price.
“We're also seeing the yields falling as well, which is positive for the gold price — at least for now. But the most critical factor is the dollar index's weakness. As long as the Federal Reserve doesn't show much interest in tapering or shifting its narrative on monetary policy, we're unlikely to see any strength coming in the dollar index. This means that gold prices may continue to move higher,” said Aslam.
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