UAE: Gold Prices May Hit $3,400 Later This Year, Say Analysts

Gold prices, globally, closed at $2,861.26 per ounce, up 0.37 per cent. In the UAE, 24K and 22K variants of the yellow metal closed at Dh344.75 and Dh320.75 per gram, respectively.

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Prices in Dubai also reached an all-time high last week when 22K touched Dh321.5 per gram.

Alex Kuptsikevich, chief market analyst at the FxPro, said from a technical perspective, gold is starting a Fibonacci extension pattern.

“The global rally commenced in October 2023 following initial signals from the Federal Reserve indicating an easing of monetary policy and a subsequent slowdown in the pace of rate hikes. Between October and November 2024, after appreciating by 55 per cent to reach the $2,790 level, gold experienced significant profit-taking, resulting in a pullback to $2,550, which represents 76.4 per cent of the initial rally. This was followed by several weeks of intense trading between bullish and bearish market participants,” he said.

“By the end of December, steady buying momentum had returned to the gold market. A move above $2,800 in late January has led to discussions about the potential onset of a new global growth wave. If this trend continues, the price of gold may potentially reach the $3,400 per troy ounce area between August and October of this year,” said Kuptsikevich.

Citi Research has also hiked its average gold price forecast, raising its three-month price target to $3,000 per ounce from $2,800 and hiked its 2025 average forecast to $2,900 from $2,800.

“The gold bull market looks set to continue under Trump 2.0 with trade wars and geopolitical tensions reinforcing the reserve diversification or de-dollarisation trend and supporting emerging markets official sector gold demand,” Citi Research said.

Rania Gule, senior market analyst at xs, said gold remains supported by rising inflation fears in the world's largest economy.

“Trump's trade policies, including the imposition of new tariffs, are expected to drive up import prices, which could translate into higher inflation in the US. In such circumstances, investors typically turn to gold as a hedge against the loss of purchasing power of the dollar. Additionally, higher inflation may reduce the likelihood of the Federal Reserve cutting interest rates, making investments in non-yielding assets like gold more attractive,” she added.

“Overall, the upward trend for gold remains intact despite the obstacles it faces. We can expect continued upward movement, and any corrective pullbacks should be seen as buying opportunities, based on the supporting factors that have not fundamentally changed,” added Gule.