Following a stellar year in 2024, where gold prices surged 27% to reach a record high of nearly $2,800 per ounce, money managers remain bullish on the precious metal. This significant gain, the largest since 2010, can be attributed to several key factors.
Firstly, increased gold purchases by central banks, particularly in China and other emerging markets, have driven demand. Secondly, the Federal Reserve’s monetary easing policies have made non-yielding gold more appealing to investors. Finally, gold’s traditional role as a safe-haven asset during times of geopolitical uncertainty, such as the ongoing conflicts in Ukraine and the Middle East, has further bolstered its appeal, reports Bloomberg.
In the Middle East, gold dropped 0.7% and continues to decline today as well. This comes as Federal Reserve officials over the weekend stressed a cautious approach to cutting interest rates this year. San Francisco Fed President Mary Daly and Fed Governor Adriana Kugler highlighted the need to keep fighting inflation to reach the 2% target.
“Last month, the Fed reduced its expected rate cuts for 2025, with Chair Jerome Powell signaling a slower pace for the ongoing rate-cut cycle. This cautious stance could pressure gold, which surged 27% last year, partly driven by US monetary easing. On the daily chart, gold is holding above the 9-day SMA at $2,623 but remains below the 50-day SMA at $2,654. On the hourly chart, the 14-day RSI is near 30.00, signaling bearish momentum. The immediate resistance level is at $2,651, while support lies at $2,606,” noted Vijay Valecha, Chief Investment Officer, Century Financial.
Gold prices in the UAE are as follows: 24 Carat at AED319.25, 22 Carat at AED295.50, 21 Carat at AED286.00, and 18 Carat at AED245.25.
