Dubai gold price rally continues in early trade

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Gold prices in the UAE were still on an upward trend on Tuesday morning due to the weakness in US dollar and Treasury yields.

According to Dubai Jewellery Group data, the 24K was trading at Dh246 per gram on Tuesday morning compared with Dh245.75 when the markets closed on Monday. Among the other variants of the yellow metal, 22K, 21K and 18K opened higher at Dh227.75, Dh220.50 and Dh189 per gram, respectively.

Spot gold was steady at $2,032.99 per gram at 9.12am, UAE time, slipping from $2,087.79 per ounce in the early hours. Bullion surged to an all-time high of $2,135.40 on Monday, before dropping over $100 in a single day to close two per cent lower.

The yellow metal has been on the upward trend over the past session. On Friday evening, the price rose to $2,075 on the background of risk appetite with reduced liquidity in the instrument. On Monday, the price of gold reached $2135, a new historical price maximum.

“The nature of the movement on Friday and Monday morning suggests that we have seen the bears in gold wash out of the market. As liquidity returned, the price pulled back to $2,060… Joining the upward move in gold may be too dangerous right now,” said Alex Kuptsikevich, senior market analyst at FxPro.

“The next few days for gold are decisive for the subsequent trend. The ability to hold above $2,050 will point to continued extreme bullish sentiment in the precious metals market.”

He added that the previous three times that gold made highs — in 2011 and three times in the last three years — it went into a sharp and deep correction that lasted for years in the first case and months in the aftermath of the pandemic.