Gold prices is expected to trade broadly within a $4,000 to $4,500 range over the next three to four months, according to a cross-section of market strategists, as the precious metal contends with conflicting pressures from a stronger US dollar, elevated bond yields and lingering geopolitical risk.
The precious metal was trading at $4,316 per ounce on Monday afternoon, down 0.68 per cent.
In the UAE, according to Dubai Jewllery Group data, 24K, 22K and 21K gold prices were trading at Dh520.0, Dh481.5, Dh461.75 and Dh395.75 per gram, respectively.
Ross Maxwell, chief strategy officer at VT Markets, said gold is being pulled in two directions.
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“Inflation and geopolitical tensions typically favour the metal, but a hawkish Federal Reserve has driven investors towards the US dollar as an alternative safe haven, which is weighing on gold.”
He said the dollar’s current strength appears to be the dominant driver, and expects gold to hold a $4,000 to $4,500 range over the coming months, though short-term spikes are possible if there is a major geopolitical shift.
Ahmad Assiri, research strategist at Pepperstone, struck a similarly cautious near-term tone, saying gold could move roughly five per cent in either direction given the current macro backdrop of high yields.
However, he noted that gold has not reacted to rising rates in the way it typically would, which he described as a promising sign for investors holding the metal for the long term.
Key swing factors
Wael Makarem, financial markets strategist lead at Exness, said the precious metal’s direction is closely tied to bond market moves.
“Rising yields tend to pressure gold, he said, but when those yields reflect credit market risk, gold tends to benefit instead – pointing to a rally after a Treasury Secretary announcement on asset buybacks as an example. Conversely, higher interest rates and inflation can prompt investors to liquidate gold holdings.”
Makarem expects further short-term pressure on gold before it moves higher, projecting a $4,000 to $4,500 trading band for the rest of the year, deviating around the metal’s opening price of roughly $4,380.
Ranim Turfa, head of research and market analysis for Mena at Tickmill, said high inflation and the Federal Reserve’s preference for higher rates have driven recent downward moves in gold, but forecast the metal would climb back towards the $4,500 level by the end of the year.
Central bank buying
Makarem added that central bank diversification away from the US dollar and into gold remains a significant long-term support factor for prices, even though the immediate driver of gold’s moves is inflation risk rather than official-sector buying.
Assiri and Maxwell both linked their gold outlook to a broader theme of portfolio diversification amid heightened geopolitical uncertainty, with elevated Treasury yields – last seen at current levels around 2006-2007 – offering investors an alternative source of income alongside gold and equities.
Source: Khaleej Times