Gold prices traded higher over a weakened dollar in Friday’s trading session, raising investors’ appetite for the yellow metal in the process.

The precious metal edged higher on the last day of the week to close at $1,827.46 an ounce nearly one per cent. In the UAE, the Dubai Gold and Jewellery Group data showed 24K traded at Dh221.5 per gram, 22K at Dh208.0, 21K at Dh198.5 and 18K at Dh170.

Analysts however observed cautious activities among market participants as they await the soon-to-be-released August non-farm payrolls data report considered crucial for the Federal Reserve’s tapering strategy.

Meanwhile, analysts noted that Gold prices can rise to $1,850 to $1,870 an ounce if it sustains a break above $1,830 following disappointing US jobs data and the continued weakness of the dollar.

Michael Hewson, chief market analyst at CMC Markets in the United Kingdom, said the dollar’s recent decline has strengthened gold prices since the end of last week. Hewson added that gold still remains in a see-saw motion, noting that the precious metal has only managed to hold above $1,800 per ounce.

“Gold prices need to try and push towards highs we saw in August, around $1,830. But for the time being, it’s probably not going to see much movement ahead of the payrolls numbers.”
Michael Hewson

However, if gold can give a sustained break above $1,830, it’ll see the next resistance near $1,850-70 region. On the downside, support for the metal is seen near $1,780-$1,800. In UAE, 24K gold price is likely to trade between Dh216 and Dh228 in days ahead.

Moreover, Michael Hewson observed that the performance of the dollar has helped gold prices to trend upward.

“We’ve seen a little bit of a weaker dollar that has helped push gold prices higher since the end of last week. At the moment, gold remains very much a case of ‘buying on the dips’ and it has managed to hold above $1,800/oz.”
Michael Hewson

In addition, another analyst Vijay Valecha, Chief Investment Officer at Century Financial also noted that US job data is responsible for the weak dollar performance.

“Disappointing US jobs data abated investors’ fears of any early taper and exerted further pressure on the already weak dollar thereby further supported the dollar-denominated metal. Nonetheless, from long term perspective, gold rallies will likely be capped as the US Federal Reserve has signalled it would pull back its stimulus later this year.”
Vijay Valecha

Meanwhile, silver was flat at $24.18 per ounce, but commodity analysts assert that the value of the grey metal would rise shortly as physical demand is expected to rise in the next few months.

On the fundamental side, the physical demand of silver is expected to increase in the next few months thanks to a strong demand buoyed by the industrial sector.

Prices of other precious metals were mixed as platinum shed 0.4 per cent at $999 per ounce, while palladium rose 0.2 per cent to $2,446.87 per ounce.

Experts also suggest that the precious metal could very likely continue the long-term uptrend but needs to clear the $1,830 mark which would likely be made possible from a continued decline in the dollar.