DOHA: 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.