Gold unlikely to see significant downside this week, say commodity analysts
Gold prices are expected to trade in range-bound over the next two months hovering between $1,675 and $1,900 per ounce, according to commodity analysts.
Spot gold price last closed at $1,787.53 per ounce, up 0.66 per cent.
In the UAE, the Dubai Gold and Jewellery Group data showed 24K trading at Dh216.5 per gram, 22K at Dh203.25, 21K at Dh194.0 and 18K at Dh166.25 on Sunday morning,
The precious metal’s prices have been looking towards the US Federal Reserve over the last few weeks concerning its monetary policy.
“The strong US jobs report was not a big negative for gold. The most significant job additions happened in leisure and hospitality, sectors where wages and inflation gains are thought to be transitory. This factor will help the US Federal Reserve delay the interest rate hikes and tighten the policy,” said Arun Leslie John, chief market analyst, Century Financial.
John said for the next two months, the international gold spot price will likely be range-bound from $1,675 to $1,900 per ounce. “This week, 24K UAE gold prices will probably touch Dh230 per gram while support is at Dh221.50,” he added.
In the long term, John sees gold rallies are likely to be capped as the Fed will likely start the tapering process by the beginning of next year, raising short-term yields.
Last week Fed Governor Christopher Waller stated that he favours scaling back asset purchases sooner than expected.
Naeem Aslam, the chief market analyst at London-based AVA Trade, said although gold price moved lower on the back of the US non-farm payroll (NFP) data, a large number of investors have already started to price a hawkish stance. “This means that we may not see any significant downside move in the gold prices over this week,” he added.