Dubai: 24K gold price rising to Dh220 per gram this week

Dubai - After a tumultuous start, when prices plunged to $1,688, the precious metal showed strong signs of recovery.

Gold prices made a smart recovery last week and the trend is likely to continue in the coming week, say commodity analysts.

After a tumultuous start, when prices plunged to $1,688, the metal showed strong signs of recovery and ended the week at $1,779 an ounce as bullion markets reacted positively to the release of US inflation data.

Vijay Valecha, chief investment officer at Century Financial, said signs of moderating inflationary pressure in the US eased fears that the Federal Reserve may soon pare back stimulus. This resulted in a pullback in dollar and Treasury yields which benefited the metal.

“Another factor that could be positive for the precious metal is the ongoing spike in new Delta variant cases, especially across China. In addition, markets will be keenly eyeing the release of this week’s Fed meeting minutes to ascertain the overall tone amongst its members.,” he said.

“Gold near-term support and resistance can be seen at $1,720 and $1,790-$1,800 levels. In the UAE markets, gold is expected to trade in the range of Dh206 and Dh220 for the immediate term,” said Valecha.

Dubai Gold and Jewellery Group data showed 24K trading at Dh215.5 per gram; 22K at Dh202.5; 21K at Dh193.25 and 18K at Dh165.75 on Sunday.

While a majority of the Federal Reserve officials have started offering hawkish commentary with regards to the tapering plans, the rise in new cases just complicates the matter for the Fed.

Naeem Aslam, chief market analyst at AVA Trade, said the consumer prices data would force the central bank to wait and watch upcoming reports more closely before making a firm decision relating to its monetary policy.

waheedabbas@khaleejtimes.com

• Dubai