Gold, on Tuesday, June 20, however, appreciated slightly by 0.1 per cent to $1,243.90 an ounce, Reuters reports.
The price of gold dipped to $1,242.61 an ounce, its lowest level in nearly five weeks on Monday as the US dollar strengthened and a top US Federal Reserve official shared a hawkish tone, indicating that the monetary policy could be tightened gradually every year.
Tuesday’s gold prices are still a bit cheaper compared to weeks earlier, though a slight uptick has been reported.
The bullion has recently hit a near five-week low, sparking hopes that there’s a relief in the retail prices of jewelery especially during the gifting season of Eid.
A price comparison by Gulf News showed that gold fans in Dubai can still find some bargains if they opt to shop today, with the current retail rates still a lot lower compared to about two weeks earlier, when ornaments cost nearly Dh5 more expensive per gram.
The price of 24K, for example, stood at Dh151.75 per gram as of 9am on Tuesday, still a lot lower compared to the rates in June 7, when the metal soared to Dh156.50 per gram.
There are indications, however, that the downtrend may not continue over the long term, leaving Eid shoppers little time to score some bargains before the holidays kick off.
Gold is one of the popular items during gift-giving occasions like Eid and with the festivities set to start next week, retail shops are likely going to be busy soon.
“Eid is an important occasion for jewellery retailers as families traditionally exchange gifts during Eid and they often buy gold or diamond jewellery. We are looking forward to a double digit growth compared to last Eid,” said Karim Merchant, group CEO and managing director of Pure Gold Jewellers.
The high demand for jewelery during Eid, however, is not likely going to impact prices. “[Gold prices] are more dependent on political and economic factors, so I do not expect any direct impact on gold prices during Eid,” Merchant added.
“Gold investors and traders were spooked by the hawkish tilt presented by Federal Reserve chair Janet Yellen following the latest US rate hike. Coming just a few hours after data had shown weakness in both [consumer price index] and retail sales, the hawkish tone caught the market off guard,” explained Ole Hansen of Saxo Bank.
According to Hansen, another waiting game can now be expected as traders turn to incoming economic data to see whether the Fed’s optimism and the planned speed of subsequent rate hikes can be justified.
For this week, market watchers may need to keep an eye out for certain developments, including the US employment data that is scheduled to be out on Thursday, as well as central bank activity and Brexit negotiations that just kicked off in Brussels.
