Gold prices inched higher in Dubai at the opening of the markets on Wednesday, rising by nearly Dh2 per gram in the past 24 hours.
In the UAE, the 24K variant opened of the yellow metal at Dh282.0 per gram at 9am local time as compared to Dh281.75 per gram at the close of the markets on Tuesday. Yesterday, it gained Dh1.75 per gram during the day. Among the other variants, 22K was trading at Dh261.0, 21K at Dh252.75 and 18K at Dh216.75 per gram, respectively, on Wednesday.
Globally, gold was steady at $2,327.64 per ounce at 9.07am UAE time as softer-than-expected US retail data strengthened hopes that the Federal Reserve will cut interest rates this year.
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Ole Hansen, head of commodities strategy, Saxo Bank, said the precious metals sector is undergoing an extended period of consolidation, and following the strong run-up earlier this year, this phase gives traders and investors time to catch their breath while adapting to new and higher levels.
“Following two unsuccessful attempts to establish support above $2,400, gold has, since early April, seen most of its daily closes within a $2,280 to $2,380 range. The biggest setback during this time was when data showed that after 18 months of non-stop buying, the People’s Bank of China paused their purchases in May,” said Hansen.
Naeem Aslam, chief investment officer at Zaye Capital Markets, said it is likely that the price action may actually test the support of $2,300 in the coming days, as it appears that the bulls are failing to defend.
“A break of the major support without any new buyers at that level may push the price further lower towards the next important price level of $2,150,” he said.