Vijay Valecha, Chief Investment Officer at Century Financial, said gold prices are facing pressure as a stronger US dollar and rising real yields continue to weigh on the precious metal.
Gold prices in the UAE remained steady on Monday, with 24K gold holding at Dh484.5 per gram for the second time in a week. A stronger US dollar and rising Treasury yields continued to limit demand for gold despite its traditional appeal as a safe-haven asset.
Other gold categories were also unchanged, with 22K trading at Dh448.75 per gram, 21K at Dh430.25, 18K at Dh368.75 and 14K at Dh287.75 per gram.
Spot gold was trading at $4,012.36 per ounce, marking a 0.21 per cent increase, while silver prices climbed 2 per cent to reach $56.76 per ounce.
Vijay Valecha, Chief Investment Officer at Century Financial, said gold prices are facing pressure from a stronger US dollar and higher real yields.
“The precious metal is at risk of falling below the psychologically important $4,000-per-ounce level. Stronger US economic growth, ongoing inflation concerns and expectations that the Federal Reserve may maintain tighter monetary policy for longer are supporting the dollar and raising the opportunity cost of holding non-yielding gold,” he said.
Valecha said continued central bank purchases are likely to provide some support and limit further declines. However, he expects gold to remain largely range-bound in the second half of the year unless there is a major shift in monetary policy or global economic conditions.
“If the current environment continues, gold could trade around $4,100 an ounce, with economic data, Federal Reserve decisions and geopolitical developments remaining the main factors influencing prices,” he said.
