Dubai: Gold prices rise after 6% loss last week

Gold prices opened higher on Monday as 24K gained one dirham per gram at the opening of the market in Dubai following a six per cent drop in its prices last week.

Analysts say that the precious metal would see a bearish trend in the near future after the US Federal Reserve’s recent announcement about interest rates.

Last week, gold posted its worst weekly performance since March 2020 after the Reserve signalled a sooner-than-expected tightening in its monetary policy.

Spot gold climbed 0.7 per cent to $1,775.96 per ounce at 7.30am UAE time. However, it lost some gains and was trading at $1,771.05 at 9.30am UAE time, up 0.1 per cent.

In the UAE, 24K retail price gained one dirham to Dh214.75 per gram on Monday morning, 22K rose to Dh201.75, 21K jumped to Dh192.5, and 18K increased to Dh165.0.

Margaret Yang, a strategist at DailyFX, said prices stabilised at around $1,770 on Monday morning as the US dollar retreated slightly from its two-month high.

“Some investors may take this opportunity to buy the dips, but uncertainties surrounding the Fed’s next interest rate move may continue to weigh on prices,” she said.

“Gold has been riding the tailwind of ultra-low interest rate environment and central banks’ quantitative easing since the Covid-19 pandemic, and thus it may be more vulnerable to a pullback when the reverse begins,” said Yang.

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She said the precious metal price may have found an immediate support at around $1,770 but breaching this level may open the door for further losses with an eye on $1,676 for support.

• Dubai