28/01/2016 06:00 AST
Gold continued its ascent on Wednesday, hovering at levels not seen since late last year.
The precious metal’s appeal has been on the rise, as the US dollar started to show signs of softening while investors await the Federal Reserve’s decision on interest rates.
Analysts said today could be a good time for gold bugs to stock up on the yellow metal, as prices look set to rise further to hit $1,200 an ounce.
As of 11am Wednesday, the price of 24-carat gold in Dubai rose to Dh135 per gram, up by Dh7 from December 31st. At the same time, spot gold settled at $1,119.46 an ounce by 0630 GMT, not far below Tuesday’s peak of $1,122.90, according to Reuters.
Rolf Schneebeli, CEO of Gold Services AG, said he has been impressed by the performance of gold during the last couple of weeks.
“The basic dependencies have changed as well. Gold has again established itself as a hedge against the uncertain developments in the stock market,’ Schneebeli said.
“Until three weeks ago, it would not have seemed possible that gold would increase after a major drop in stock prices in China.”
While it’s too early to assume that gold will soon reach the $1,200 level, Schneebeli said prices will definitely climb higher.
“Gold needs to establish a firm base before going higher again, but then again, timing is always a big surprise. But even if the price doesn’t go to $1,200 in the next few weeks, it surely will in the future. Buying now will be no mistake if looking at it in the long term,” Schneebeli told Gulf News.
Karim Merchant, group CEO and managing director of Pure Gold Jewellers, however, argued that gold’s prices remain volatile.
“Currently, there is a lot of uncertainty in the world markets and precious commodity is no exception. Fundamentally, gold still has downward pressure,” Merchant said on Wednesday.
Gulfnews
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