(MENAFN- Khaleej Times)
Gold price rally continued on Monday in Dubai, reaching an all-time high of Dh313.50 per gram. By 6 pm on Monday, the 24K variant of the yellow metal was trading at Dh1.25 per gram higher at Dh313.5 compared to Dh312.25 at the close of the markets over the weekend.
Among the other variants, 22K, 21K and 18K were selling higher at Dh290.25, Dh281.0 and Dh240.75 per gram, respectively.
Globally, gold was trading at $2,582.61 per ounce at 6.15 pm UAE time, up 0.14 per cent.
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The precious metal has been on a meteoric rise over the past few months reaching unprecedented heights, primarily driven by expectations of a US Federal Reserve interest rate cut, a weakening US dollar, and geopolitical tension in the Middle East region.
From a technical perspective, gold broke above the $2,530 psychological barrier last week. Vijay Valecha, chief investment officer, Century Financial, said the precious metal prices climbed to all-time highs on Monday, reaching $2,589.70.
“The outlook remains positive as market participants have increased the possibility of a 50-bps interest rate cut. According to CME's Fed watch tool, the probability of a 50bps rate cut is currently at 59 per cent, up from 50 per cent on Friday,” he added.
“Looking ahead, the bullish trend is expected to continue in the short term, with the next main target being the $2,500 price mark. Conversely, breaking the $2,565 price could indicate some temporary bearish correlation,” said Century Financial's chief investment officer.
Alex Kuptsikevich, senior market analyst at the FxPro, said although gold has been gaining steadily, the extended consolidation at the end of last month removed excessive local overbought conditions, clearing the way for a rally, some of which was seen last week.
Meanwhile, markets have become increasingly optimistic as the Fed edges closer to normalising monetary policy through interest rate cuts, which improved risk appetite and added more downside pressure to the US dollar throughout last week's trading.
Mohamed Hashad, chief market strategist at Noor Capital, said the US dollar has ceased its upward trajectory since the release of US economic data indicating a slowdown in consumer prices. This data has reinforced expectations that the Federal Reserve is likely to begin cutting interest rates at its September meeting.
“This data has fuelled speculation that the Federal Reserve is likely to start rate cut September meeting as inflation retracement is a good sign for the Fed as it implies that the central bank is nearer to its official target of inflation – 2.00 per cent – so that it gives more comfort to FOMC members as they are considering the start of a rate cut,” he said.
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