Gold price rally continues in early trade in Dubai

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Gold prices rally continued on Wednesday, rising to a new record in the UAE and globally.

In the UAE, the 24K variant of the precious metal rose to Dh276.5 per gram on Wednesday morning as compared to Dh274.5 per gram at the close of the markets on Tuesday, a gain of Dh2 per gram. Similarly, 22K, 21K and 18K touched a new record high on Wednesday, trading at Dh256.0, Dh247.75 and Dh212.5 per gram, respectively.

Globally, spot gold was up 0.07 per cent at $2,281.8 per ounce at 9.15am UAE time. It jumped more than one per cent earlier in the day to hit a record high of $2,288 an ounce. The precious metal is rallying due to concerns of rising inflation.

Nick Cawley, a senior strategist at dailyFX, said the yellow metal has posted fresh record highs over the last few days, ignoring the stronger US dollar and the higher US rate backdrop.

“The precious metal made a bullish technical flag set up recently and broke higher mid-last week after probing upside resistance. The recent move is starting to look overbought, and for the precious metal to continue higher, a period of consolidation is needed,” he said.

“We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests gold prices may continue to rise,” he added.