Analysts said sentiment towards gold is improving after several weeks of weaker performance. However, the absence of strong upward momentum is preventing prices from making a significant move higher.
Gold prices in Dubai continued their upward trend on Wednesday morning, with the 24K variant moving closer to the Dh500-per-gram mark.
The 24K gold price opened at Dh496 per gram on Wednesday, up from Dh492.25 at Tuesday’s market close, reflecting continued momentum in the precious metals market.
The other gold variants — 22K, 21K, 18K and 14K — were also trading higher at Dh459.25, Dh440.25, Dh377.50 and Dh294.25 per gram, respectively.
The international spot gold price stood at $4,134 per ounce, up 0.96%, while silver was trading at $60.73 per ounce, gaining 1.18%.
Analysts said sentiment towards gold is improving after several weeks of weaker performance. However, a lack of strong upward momentum is preventing prices from making a significant move higher, said Vijay Valecha of Century Financial.
“Leading banks have not revised their long-term bullish forecasts, predicting gold will recover to $4,500-$5,000 an ounce over the next several quarters,” he said.
“However, it is unlikely that the market will see a strong gold rally driven by official demand alone. While central bank gold purchases remain robust, they are well below the record levels seen in 2024. A sustained gold rally is more likely when markets begin pricing in a more accommodative Federal Reserve policy.”
Valecha said near-term attention will remain focused on US job openings, with signs of weakness in the labour market likely to support gold prices. Conversely, a resilient labour market could “keep the Fed from easing policy, which would keep the dollar strong and pressure gold prices.”
He added that gold remains in a consolidation phase, with buyers attempting to push prices above the $4,150 level but struggling to establish higher highs.
“Buyers have successfully defended $4,000 support for several sessions in a row and have managed to lift prices back towards $4,060. A break above the $4,100 level would be required to push the market higher, but a failure to hold above $4,000 would open up the next level of support at $3,960,” he said.
