The nine-month long rally of gold price is fizzling out. The yellow metal has fallen around 10 percent in the last two months in the local market.
The precious metal has become cheaper by QR13 since the last week of September. Strong surge in dollar and Donald Trump’s- the President Elect of US- plans for economy is pulling down gold prices.
A gramme of 22 carat gold was trading yesterday at QR140 in local market which is substantially lower from QR153 on September 26. The purest form of the metal -24 carat- was trading at QR150 yesterday while it was at QR163 per gramme on September 26 .
“Gold is impacted by international factors currently and rise in the dollar is one of them. The Dollar Index has risen to a fresh 14-year high which has weakened gold prices,” Ahmad Akl, Doha based Financial Analyst told The Peninsula.
“The Federal Reserve, US Central Bank, is widely expected to raise interest rate in its December meeting which will support dollar. This rate hike will pull out money from gold and investors will look to invest in high yielding bonds and bank deposits,” added Akl.
The dollar index, a measure of its value against a basket of currencies, rose to 100.53 yesterday, its highest since April 2003. Federal Reserve’s Vice Chairman Stanley Fischer said on Friday that US economic growth prospects appear strong enough for the Fed to proceed with a gradual increase in interest rates.
Trump’s win in US election and his speech has raised optimism that increased fiscal spending and tax cuts under a his administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.
Prices of yellow metal in Qatar follow global prices as prices of gold here are linked to international market, mainly the London Bullion Market.
Gold was on the upward move since the start of this year and had jumped around 24 percent in the local market in the first nine month. The road ahead for gold looks rough and prices are expected to decline in the near future. “In the international market, gold prices have fallen from $1,300 per ounce to $1,225 in a matter of few weeks. It may go down further", he said.
