By Cleofe Maceda
Dubai: More downside is expected for gold as investors anxiously await the US Federal Reserve's decision on interest rates that will be known on Wednesday evening.
Analysts are forecasting the bullion to move lower towards $1,300 per ounce instead of climbing to the $1,400 level. The Fed's ruling on interest rates can have drastic impact on the precious metal, as well as the US dollar. Increased rates could put pressure on gold prices.
In Dubai, retail rates remained stable on early Wednesday morning, ahead of the Federal Reserve Open Market Committee (FOMC) discussions. As of 9am, the price of 24-karat gold remained unchanged at Dh159.75 per gram. Other gold pieces, 22K, 21K and 18K traded at Dh150.25, Dh143.25 and Dh122.75, respectively.
Another key factor to watch out for is the Bank of Japan meeting that is scheduled on Friday. The waning fears of Brexit aftermath, rising stock markets and falling bond yields could also provide less support for the bullion.
“We believe gold prices have come down and should continue doing so for [a number of] reasons. The impact of the Brexit on the European economy and financial markets has not been as negative as feared. Rising equity markets and falling bond yields signal returning risk aversion, which is causing headwinds for gold,” Carsten Menke, commodities research analyst at Julius Baer, told Gulf News.