Muscat: Gold prices dropped on Friday, logging their steepest weekly decline in over five months, pressured by a stronger dollar and as markets absorbed the implications of Donald Trump's victory and its potential impact on US interest rate expectations.
Gold prices in Oman on Saturday:
24 karat - RO34
22 karat - RO32
18 karat - RO25
Earlier in the day, Gold prices surged over 1.7 percent after the Federal Reserve delivered a widely anticipated 25 basis point interest rate cut.
While the market had largely priced in this move, the Fed’s acknowledgment of economic uncertainty and balanced risks bolstered gold’s safe-haven appeal, according to Mohamed Hashad, chief Market Strategist, at Noor Capital.
Potential Price Scenarios:
A decline below the November 6 low of $2,652 could lead to further losses toward the 50-day SMA at $2,639 and the October 10 low of $2,603.
The Federal Reserve’s monetary policy decisions significantly impact gold prices.
Lower interest rates typically weaken the US dollar and boost demand for gold as an inflation hedge and safe-haven asset.
Conversely, higher interest rates tend to strengthen the dollar and reduce gold’s appeal.
"In the last month, the story has been the uncertainty risk of the election and if there was going to be normalization of transition, but this election appeared to be very decisive on the White House," Reuters quoted Alex Ebkarian of Allegiance Gold.
"A lot of risk-on assets started benefiting in terms of the potential future implication of policies, so we had money go out of metals into these alternatives."
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