Investors and jewelry purchasers are analyzing whether the current drop is the start of a wider retreat or is just a normal cooling period following an extraordinary rally in light of gold’s recent price changes. Due to robust local demand and widespread support from international forces, gold prices in the United Arab Emirates rose slightly on Friday.
Dubai Gold and Jewellery Group reports that 24-carat gold closed at Dh482.75 per gram, up from Dh479 the day before. In contrast, 22-carat, 21-carat, and 18-carat gold traded at Dh447, Dh428.50, and Dh367.50, respectively. Although the increases were modest, they were noteworthy since they came during a week in which bullion prices around the world have been declining from all-time highs.
Globally, gold rose to a record high of almost $4,300 an ounce earlier this month before falling to approximately $4,050, a 5.8% decrease. Market strategists characterize the move as a classic correction after extreme overbought conditions, despite the fact that the dip has alarmed some retail investors. The necessity for consolidation has been indicated by technical signs. During the rise, the Relative Strength Index (RSI), a commonly used indicator of momentum, hit an all-time high of 92, well above the 70 level usually considered overbought. Regardless of the underlying factors, such a high nearly usually comes before a retreat.
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