Gold prices in Dubai are likely to remain under pressure and trade around current levels due to high US Treasury yields. Investors expect the US Federal Reserve to announce tapering next month.

The precious metal rose on Friday after comments from Federal Reserve officials suggested that interest rate hikes may not be there in the immediate term.

Cleveland Fed President Loretta Mester had said that US interest rate increases aren’t coming any time soon.

Gold was trading at $1,792.47 per ounce on Sunday morning, up 0.42 per cent. In the UAE, 24K was trading at Dh217.0 per gram at the opening of the market on Sunday. Among the other variants of the precious metal, 22K was trading at Dh204.0, 21K at Dh194.5 and 18K at Dh166.75.

He sees rising inflation expectations and burgeoning commodity prices could force the Fed to go for earlier than expected rate hikes.

“Financial markets are already pricing in two interest rate hikes from Fed in 2022. Moreover, Fed is likely to announce tapering in the November meeting. And US 10 year yields have already surged to 1.705 per cent in the last trading session. These factors could pressure the yellow metal in the near term,” said Valecha.

“The safe-haven asset is likely to face a strong resistance near $,1804 and supports $1,788 and $1,779. In the UAE, 24K is likely to trade between Dh214 and Dh218.75 per gram,” he added.

Valecha said some market participants also perceive rising cryptocurrencies as a better inflation hedge than gold. Bitcoin recently crossed the $60,000 mark last week for the first time in six months. It was trading at $61,002.75 on Sunday morning.

-waheedabbas@khaleejtimes.com

Waheed Abbas

<!–Article Script start

–> <!–

Click/tap here to subscribe to Khaleej Times news alerts on WhatsApp. Make sure you save the phone number under Contacts on your phone for uninterrupted service.

–> Source