The price of gold in Dubai decreased by 11 dirhams per gram on Monday morning, as 24K fell to 505.5 dirhams per gram at the market opening.
Over the past week, the precious metal lost 18.25 dirhams per gram, as prices continue to be under pressure amid the strengthening US dollar. Other varieties, such as 22K, 21K, 18K, and 14K, traded at prices of 468, 448.75, 384.75, and 300 dirhams per gram, respectively.
Globally, gold fell by 2.01 percent to 4191.88 dirhams per ounce, and silver dropped by 3.51 percent to 61.92 US dollars per ounce as of 9:10 AM UAE time.
According to Vijay Valechi, Chief Investment Officer at Century Financial, gold remains under pressure due to the strong recovery of the US dollar, which is approaching three-month highs, against the backdrop of a hawkish Fed forecast and selling in the global bond market. He noted that energy costs and expectations of further Fed rate hikes have primarily determined gold's trajectory in recent weeks, as higher borrowing costs usually negatively affect bullion.
The analyst added that despite short-term difficulties, many investors are still betting on growth, as gold is regaining its traditional value as a portfolio hedge, with demand for ETFs remaining high.
From a technical perspective, gold prices are supported by a level of about 4261 US dollars from an upward trend line connecting the lows of July 17, July 29, August 3, and September 16. Thursday's daily candle failed to close below this trend line, indicating the strength of the metal and limiting the fall for bullion. Silver shows similar support from the trend line, with Friday's price movement finding support around 63.48 US dollars, suggesting a market structure leaning towards growth for both metals.
Simon-Peter Massabni, Head of Business Development at xs.com, stated last week that the stronger US dollar, rising treasury yields, and growing expectations that the Federal Reserve will maintain restrictive monetary policy are putting pressure on gold.