Gold prices are expected to touch $1,860 an ounce this week after the precious yellow metal registered its best week in six months, according to commodity analysts.
The metal closed at $1,831.42 per ounce on Friday, gaining 3.5 per cent last week.
In the UAE, 24K retail price last closed at Dh221.75 per gram, 22K at Dh208.25, 21K at Dh198.75, and Dh18K at Dh170.5.
Vijay Valecha, Chief Investment Officer (CIO) at Century Financial, said he would expect 24k gold prices to trade between Dh218 and Dh225.5 in Dubai this week.
The metal’s staggering last week rally is attributed to disappointing US economic data, primarily the jobs data. The US non-farm payroll report showed that the economy added only 266,000 jobs in April against initial expectations of 978,000.
Besides, April’s reading was also revised down to 770,000 from 916,000 jobs that were reported earlier. The data failed to allay concerns surrounding early US Federal Reserve tapering talks and reaffirmed market expectations that the Central bank will keep interest rates near zero levels for a longer period.
“Consequently, this weighed on the dollar and Treasury yields and lifted the dollar-denominated commodity. However, optimism on Wall Street limited the downside for the yields and capped the metal's upside,” said Valecha.
“For this week, gold traders look forward to the US CPI (consumer price index) and retail sales data for fresh hints on the economy, with bulls having their eyes set on $1,850-$1,860, which coincides with the 200-day monthly average and downward trend resistance. Also, strong support for the gold is seen near $1,800 level,” added Valecha.
The Fed has also recently reiterated its accommodative monetary policy stance.
Daniel Moss, an analyst for DailyFX, said he would expect the market to move upwards after it reopens on Monday. “But it won’t persist over a long period of time,” he added.