Weak dollar, falling yields drive gold towards $2,100

dubai — Gold prices continued their bullish trend on Wednesday after breaching the $2,000 psychological barrier, and hit new peak of $2,055 per ounce as investors looked for safe-haven assets amid a rising geopolitical tensions and uncertainty over the ongoing coronavirus pandemic.

Spot gold prices rose 1.53 per cent to $2,049.00 an ounce, after earlier reaching a record $2,055.1006. It set a new record after scaling $2,000 for the first time on Tuesday.

Market insiders and experts said gold will sustain its upward trend and may cross the $2,100 level before going for a price correction next week. They said the yellow metal will shine in the wake of a weak dollar, falling US Treasury yields and expectations of more stimulus measures for the pandemic-ravaged global economy.

“The precious metals are likely still in the early stages of a long-cycle bull market despite the impressive 35 per cent rally for gold and 70 per cent rally in silver from the March lows. We see opportunities

for gold to continue its rally to $2,100 per ounce,” said Norman VIllamin of CIO Wealth Management.

“In silver, we seek opportunities to build positions as the bull market in silver continues into 2021. With the scramble for physical metal intensifying, we continue to prefer physical gold and silver to their financial counterparts,” he said.

The precious metal is also benefiting from heightened uncertainty around the long-term effects of the global health crisis.

In Dubai, 24K price rose to 247.75 per gramme while 22K and 21K climbed to 232.75 and 222 per gramme, respectively. Traders charged Dh2,046 for an ounce in Dubai compared to Dh,2000 on Tuesday.

The precious metals are likely still in the early stages of a long-cycle bull market Norman Villamin,

Analyst at CIO Wealth Management