Dubai gold prices ease off record highs
Dubia: Gold prices eased slightly in the last couple of days, but analysts warned that the precious metal will continue rising this year.
Karim Merchant, group CEO and managing director of Pure Gold Jewellers in Dubai said investors normally seek refuge in the precious metal during times of uncertainty, so the prices will continue to increase for as long as the global markets remain volatile.
However, hopes for a gold rush could return if the market dynamics change. In particular, the upside in prices will be capped if the US dollar goes up or the United States (US) Federal Reserve decides to adjust the interest rates anytime this year.
“Gold is a safe haven during economic uncertainty and that is what we are witnessing with the recent increase in prices,” Merchant told Gulf News.
“However, if the US Fed starts increasing interest rates, gold can become more volatile with downward pressure on price.”
Gold prices registered a 20 per cent increase recently. In the last couple of days, however, prices started to ease a little as investors are awaiting the results of the European Central Bank monetary-policy meeting.
As of 2.40pm on Thursday, 24-carat gold was retailing at Dh151.50 per gram, slightly down from Dh152.50 on Sunday.
In her latest analysis released on Thursday, Georgette Boele, co-ordinator for foreign exchange and precious metals strategy at ABN Amro, said that precious metal prices look set to move higher during the course of the year.
Last week, the precious metal climbed to its highest level in 13 months. As of Friday afternoon, spot gold stood at around $1,260 an ounce, far from what other analysts had forecast last year.
Gold was in a free fall in 2015 due to widespread speculation about Fed interest rates.
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