UAE: Gold prices plunge, likely to drop further

PHOTO

Gold prices neared a nine-month low on Tuesday, as the US dollar strengthened to its highest level in 20 years, stifling demand for greenback-priced bullion.

Spot gold was down 2.17 per cent at $1,726.69 per ounce at 9.19am UAE time.

In the UAE, gold prices fell more than one dirham per gram at the opening of the market on Tuesday. The 24K gold price fell to Dh209.5 per gram on Tuesday as compared to Monday’s close of Dh211.0 per gram. Among the other variants of the yellow metal, 22K opened at Dh196.75 per gram, 21K at Dh187.75 and 18K at Dh161.0.

Craig Erlam, senior market analyst, UK and EMEA, OANDA, said the dollar is king and gold has well and truly lost its shine after breaking below $1,800 last week.

“Don't get me wrong, we saw plenty of resilience in the run-up to it but the eventual breakout was explosive and it's still in a state of shock. It barely pared any of the losses before the selling pressure started to kick back in. With the dollar so heavily backed, there isn't much of a bullish case for gold currently, with $1,680-1,720 offering the next major test of support,” said Erlam.