Gold prices dip on profit-taking

Analysts predict rebound though spot gold is down 0.2% at $1,288.20 per ounce

Gold prices dipped yesterday as some investors locked in profits at the end of the week, but there are expectations that they could move higher this week.

Spot gold was down 0.2 per cent at $1,288.20 per ounce by 1300 GMT (5pm UAE time), with the price down about 0.4 per cent for the week.

US gold futures for December delivery dipped 0.4 per cent to $1,287.70 (Dh4,730).

“I think gold will move back towards $1,300 next week or the week after, maybe on the back of dollar weakness,” Georgette Boele, commodity strategist at ABN Amro in Amsterdam, said.

“There are still some longs in the market, so there’s more technical momentum as they try to push prices up again to see what happens in the last weeks of the year.”

Boele said gold was supported by the release of the US Federal Reserve’s minutes on Wednesday, regarded as “dovish” and which lowered market expectations slightly of a March rate hike.

A December rate hike has already been priced in.

The Fed’s cautious view of inflation could lead to a longer period of low interest rates which provides a solid platform for gold investment, said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices. Sensex (IN)