The yellow precious metal is gaining some ground, with retail prices in Dubai posting a nearly 5 per cent rise per gram since the beginning of the year.
Gold’s rise from the December low has been due to a weak US dollar and strong safe-haven demand that resulted from the new initiatives announced during Donald Trump’s first few days in office.
The yellow metal also gained some support from strong Chinese demand in the run-up to the Lunar New Year celebrations, while uncertainty remains on that outcome of the upcoming US Federal Reserve meeting on Wednesday.
As of 10am, 24K gold in Dubai retailed at Dh145.75 per gram, up by 4.48% from January 1, 2017.
Spot prices also rose 0.4 per cent to regain the $1,200 level, as the greenback moved lower against other currencies, gulfnews reports.
“Gold is a safe haven, it strengthens when US dollar weakens. As the US dollar has weakened due to uncertainties unleashed by President Trump’s foreign trade and immigration policies, gold prices have strengthened,” Karim Merchant, group CEO and managing director of Pure Gold Jewellers, told Gulf News.
“There is also a little bit of wait and watch on FED decision on further interest rate hike.
Analysts have warned that Trump’s new initiatives “may sway the pendulum back in favour of gold.”
The precious metal had earlier traded lower for the first time in more than a month as traders booked profits ahead of the Chinese New Year. The bullion, however, started to regain strength on Monday, just shortly after Trump’s latest move to stem immigration flows into the United States.