UAE: Global recession fears could limit gold decline

UAE: Global recession fears could limit gold decline

24K gold likely to trade between Dh219 and Dh230 per gram

Published: Sun 5 Jun 2022, 12:23 PM

Gold prices will be under pressure in the coming week after a strong US job report but global recession fears will limit the decline, say commodity analysts.

The yellow metal gave up all its gains on Friday to trade near $1,850 per ounce in the immediate aftermath of the official US labour market report, which revealed 390,000 jobs being added in May, higher than expected.

“The (jobs) data fuelled the expectations of an aggressive Federal Reserve tightening outlook which buoyed the treasury yields and dollar higher and weighed on gold. However, the unemployment rate came in higher at 3.6 per cent, above the expected rate of 3.5 per cent… As investors digest the information, it is likely to tame down the aggressive rate hike expectations, which should support the metal. Meanwhile, rate hike fears are being countered by recession fears limiting the metal's downside,” said Vijay Valecha, chief investment officer at Century Financial.

Technically, he said, the metal is trading in a range of $1,830-$1,875, and only a break on either side will determine the next direction. Below $1,830, the next support is seen near $1,810.

Globally, economists