Gold prices rally continued, jumping more than two dirhams per gram to hit over a 3-month high at the opening of the markets on Thursday.
According to Dubai Jewellery Group data, the 24K variant of the precious metal was trading at Dh252.75 per gram on Thursday morning as compared to last night’s close of Dh250.5 per gram. Whereas 22K, 21K and 18K were trading at Dh234.0, Dh226.5 and Dh194.0 per gram, respectively.
Spot gold was up 0.33 per cent at $2,086.69 per ounce, as of 9.10am UAE time, hitting its highest since December 4, when prices raced to a record high of $2,135.40. It looked set to mark its best year in three with a 14 per cent gain.
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The yellow metal prices have been rallying due to weakness in the US dollar and expectations of interest rate cuts by the US Federal Reserve in 2024.
High prices prompt consumers in the UAE to sell their gold holdings and jewellery to cash in on higher rates and then buy it again later when the prices go down.
Diego Colman, the contributing strategist at dailyFX, said the yellow metal has breached a critical resistance region stretching from $2,070 to $2,075. “If this bullish breakout is sustained and prices start consolidating to the upside, the bulls could be emboldened to target the all-time highs near $2,150,” he said.
However, he noted that if bears gain the upper hand and drive gold downwards, then the $2,075-2,070 zone is crucial. “If this support fails, bullish aspirations may be put on hold, potentially leading prices towards $2,050. On further weakness, the focus shifts to $2,010,” he added.