UAE: Gold prices jump as dollar retreats

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Gold prices edged higher on Monday morning as the US dollar pulled back slightly, although the gains were capped by expectations of aggressive rate hikes by the Federal Reserve.

Spot gold rose 0.22 per cent to $1,714.29 per ounce by 9.10am UAE time.

In the UAE, the 24K gold price jumped 75 fils per gram to Dh207.75 at the opening of the market on Monday. Among the other variants of the yellow metal, 22K opened at Dh195.25 per gram, 21K at Dh186.25 and 18K at Dh159.5.

The dollar retreated after hitting a near 20-year high last week against its rivals, making greenback-priced bullion more expensive among buyers holding other currencies.

The US Fed officials signalled Friday they will likely stick with a 75-basis-point interest rate increase at their July 26-27 meeting, though a recent high inflation reading could still warrant larger increases than anticipated later in the year.

Jeffrey Halley, senior market analyst at Oanda, said overall, gold’s price action continues to be uninspiring with recoveries limited in scope, while the falls, when they do occur, are much larger and faster in scope.

“Gold’s fate this week rests on the hopes that the investor sentiment rally seen elsewhere, inspires more US dollar weakness this week,” said Halley.

According to Oanda analyst, gold has initial support at $1,700, followed by the more important $1,675 an ounce zone. “A sustained failure of $1,675 will signal a much deeper move, targeting the $1,450 to $1,500 an ounce regions in the weeks ahead. Gold has resistance nearby at $1,720, then $1,745, now a triple top. That is followed by $1,780, $1,800, its June downward trendline,” he added.