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Analysts said that due to Fed Chairman Jerome Powell’s hint that this year instead of next year, gold’s gains may be limited.
Precious metals closed at US$1,817.92 per ounce this week, and rose by 1.35% on Friday. In the UAE, 24K is closed at Dh220.0 per gram. Among other variants of precious metals, 22K closed at Dh206.75, 21K closed at Dh197.25, and 18K closed at Dh169.0.
Century Financial Chief Investment Officer Vijay Valecha said that because Powell conveyed the news that the market wanted to hear, gold broke through the 100-day and 200-day moving average resistance levels last week, approaching $1,810.
“In contrast to his long list of hawkish colleagues who want to start downsizing as soon as possible, Powell did not promise the exact time when the Fed will reduce its bonds. Although he said that he thinks the Fed may reduce the size of its purchases this year, he warned that this should not be explained. It is a sign of an imminent rate hike.
“For now, as the Fed is still committed to printing the U.S. dollar and keeping interest rates low, precious metals have reason to be happy. If precious metals break the resistance zone of $1,830, it may open the door to the $1,850-70 area, and then $1,900. However, in the long run, gold’s gains may be limited due to the Fed’s hint that it will scale down this year rather than next year. In the UAE, the price of 24k gold this week may be 217 dirhams and 228 dirhams Between transactions,” Valecha added.
Rashad Hajiyev, founder of RM Capital Consulting, said: “Gold is trying again to overcome the three-month resistance. Let us see if gold can reasonably break through and maintain its gains this time.”
He believes that the price of gold looks constructive and may reach US$1,830-35 in the next few days.
-waheedabbas@khaleejtimes.com
Wahid Abbas
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