Gold prices slipped in Dubai in early trade on the first trading day of the week after reaching a record high last week, shrugging off geopolitical tension in the Middle East region.
At 9 am UAE, the 24K variant of the yellow metal was selling for Dh321.5 per gram, down half a dirham per gram from last week’s close.
The yellow metal hit an all-time high of Dh323 per gram last week due to geopolitical tension in the Middle East between Israel and Hamas. Analysts expect yellow metal will continue to trade at current high levels due to tension in the region, expectations of further interest rate cuts by the US Federal Reserve and buying by the central banks.
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Among the other variants, 22K, 21K and 18K opened lower at Dh297.75, Dh288.25 and Dh247.0 per gram, respectively, in Dubai on Monday.
Globally, spot gold was trading at $2,656.27 per ounce, down 0.29 per cent at 9.05 am UAE time.
Alex Kuptsikevich, senior market analyst at the FxPro, said gold has hit all-time highs on each of the last six trading days.
“Thursday’s touch of $2,685 followed the strongest selling momentum since September 18, when initial profit-taking expanded following the release of strong GDP growth estimates. Short-term intraday profit-taking is both fuel for further gains and a sign of uncertainty at this stage of the market. Technically, gold has already crossed above the 161.8 per cent level of the two-year rally since August 2018. When the price has moved so far into the area of historical highs, it becomes more difficult to find new upside targets,” said Kuptsikevich.
He said more attention is now being paid to looking for signs of overbought conditions.
“Gold’s strong rally over the past three weeks is the most dangerous part of the trend for short-term sell-side traders who get involved in selling without reliable signals,” said Kuptsikevich.