Gold prices ascended nearly nine months high on Monday, as a weaker dollar and expectations of a slower rate of interest trudges from the US Federal Reserve added to bullion’s shine.
Spot gold was up 0.3 per cent to $1,926.07 per ounce.
On Monday morning, the UAE’s 24k gold prices opened at Dh232.75 per gram, while 22k, 21k, and 18k were reported in trading at Dh215.5 and Dh208.75 per gram, respectively.
Making dollar-priced gold a more stunning bet, the dollar index dropped to 0.4 per cent.
Ilya Spivak, head of the global macro at Tastylive, said, “Fed remains the priority. The market believes the Fed’s rate-hike cycle is slowing and may end soon, which is usually helping gold.“
Spivak added, “Prices are catching good support around the $1,900-$1,920 levels. The following basic level of resistance will be around $1,970.”
The Fed raised rates by 75 basis points (bps) four times last year before slowing to a 50 bps increase in December. Most traders expect a 25 bps hike at the US central bank’s next policy meeting on Jan 31- Feb 1.
Bullion is a non-yielding asset, which is why it tends to benefit amidst the lower rates, as it lowers returns on other assets such as the dollar and government bonds.
Edward Moya, a market analyst at Oanda, said gold prices were increasing as Wall Street grew confident that the Fed is substantially down with the rising rates.
He added, “The University Of Michigan presumption report showed one-year inflation expectations fell to the lowest levels since April 2021. Non-interest carrying gold is loving the slide in bond yields and could proceed with the earnings that could come in weaker than expected”.
Moya glances gold to be having strong resistance at the $1,950 region.
Above stated report presses the price hike of gold and becomes a more beautiful bet, as the dollar index is lower to 0.4 per cent.