The gold rally is anticipated to persist, having already surged by nearly 21 percent this year, with forecasts suggesting that the price of the precious metal could hit $3,000 per ounce in the near future. This surge has been primarily driven by expectations of the US Federal Reserve initiating interest rate cuts, a weakening US dollar, and heightened geopolitical tensions in the Middle East. Analysts predict that declining interest rates, ongoing geopolitical tensions, and increased demand from central banks will continue to boost gold prices.
"Gold is currently in an advancing cycle, having risen by 23 percent since its breakout in late February 2024. In 2019, a similar breakout led to a 50 percent increase over 14 months. Therefore, the current rally still has significant potential, with a minimum target of $3,000 per ounce," explained Rashad Hajiyev, founder of RM Capital Consulting. Gold closed at $2,503.34 per ounce over the weekend, having briefly surpassed $2,525 earlier in the week. In Dubai, gold prices for 24K, 22K, 21K, and 18K were trading at Dh303.25, Dh280.75, Dh271.75, and Dh233 per gram, respectively.
Alex Kuptsikevich, senior market analyst at FxPro, noted that gold encountered a resistance level at $2,525 per ounce on the spot market on Friday, a barrier it has been struggling with for the past two weeks. The pattern of smaller pullbacks and more frequent rallies indicates strong buying pressure. "Under these conditions, we can expect a breakout to historical highs soon, but it will be crucial to observe how the price reacts afterward," Kuptsikevich stated. Over the past two weeks, a triangle pattern of horizontal resistance and rising support has emerged on the gold chart, signaling that buyers are gaining momentum at higher levels.
Kuptsikevich further explained that on the daily timeframe, there is a sign of upward exhaustion. "However, a similar situation from October 2023 to February 2024 was followed by a robust uptrend rather than a short-term one." Vijay Valecha, chief investment officer at Century Financial, also forecasted that gold could aim for a range of $2,700-$3,000 in the coming months, translating to Dh330-Dh365 per gram in the UAE. Mazen Salhab, chief market strategist for Mena at BDSwiss, noted that recent data showed a slight decrease in US weekly jobless claims, which could favor gold.
"However, the US GDP growth for the second quarter was revised up to 3 percent, indicating a stable economy. This revision has bolstered the US dollar and treasury yields, slightly limiting gold's potential for further gains." Salhab also projected that ongoing geopolitical risks and strong demand from China will continue to support gold.
