Gold prices in Dubai experienced a slight decline during the early trading hours on the first day of the week, following a record-breaking surge last week. This dip occurred despite the ongoing geopolitical tensions in the Middle East region.
As of 9 am UAE time, the 24K variant of gold was trading at Dh321.5 per gram, a decrease of half a dirham per gram compared to the previous week's closing price. Last week, the yellow metal reached an unprecedented high of Dh323 per gram, primarily driven by the escalating conflict between Israel and Hamas in the Middle East. Analysts predict that gold will likely maintain its current high levels due to the regional tensions, anticipated interest rate cuts by the US Federal Reserve, and increased purchases by central banks.
Among the other gold variants, 22K, 21K, and 18K also saw a decline, opening at Dh297.75, Dh288.25, and Dh247.0 per gram, respectively, in Dubai on Monday. Globally, spot gold was trading at $2,656.27 per ounce, a 0.29% decrease as of 9.05 am UAE time.
Alex Kuptsikevich, a senior market analyst at FxPro, noted that gold has reached all-time highs in each of the last six trading days. He explained that the surge on Thursday, touching $2,685, followed the strongest selling momentum since September 18, which was triggered by initial profit-taking after the release of robust GDP growth estimates. Kuptsikevich highlighted that short-term intraday profit-taking can both fuel further gains and indicate uncertainty in the market at this stage. Technically, gold has surpassed the 161.8% level of the two-year rally since August 2018. As the price moves deeper into uncharted territory, it becomes increasingly challenging to identify new upside targets.
Kuptsikevich also mentioned that more attention is now being directed towards identifying signs of overbought conditions. He cautioned that gold's robust rally over the past three weeks poses the most significant risk for short-term sell-side traders who engage in selling without reliable signals.
