ISLAMABAD: Gold prices in the local market snapped a three-day winning row and fell by Rs500 per tola on Thursday amid an overnight decline in international bullion prices. According to the Karachi Sarafa Association, the price of one tola of 24-karat gold decreased to Rs214,300 from Rs214,800. Similarly, the gold price for 10 grams of 24-karat gold decreased to Rs183,728 from Rs184,156, showing a decrease of Rs428. This decline in gold price came a day after the government and the International Monetary Fund (IMF) reached a staff-level agreement that paved the way for Pakistan to receive $700 as part of the stand-by agreement. Meanwhile, the Pakistani rupee recorded gains against the US dollar in the inter-bank and open markets, snapping its 17-day long losing streak. Rupee’s appreciation makes gold cheaper for local buyers as gold is rated in US dollars. TLTP
During the last four sessions, gold prices in the local market have increased by Rs3,300 per tola. Gold price in the country decreased by Rs3,600 (-0.61 percent) per tola last week as the gold rate for a single tola of 24-karat on a week-on-week (WoW) basis decreased to Rs211,000 from Rs214,600, according to Karachi Sarafa Market.
On the other hand, as of 1300 hours GMT, gold futures in the international market were available at $1,964.80 per ounce, showing an increase of $5.60. Out of the $5.60 increase, -$2.25 was due to strengthening of the US dollar and +$7.85 was due to predominant buyers, according to the Kitco Gold Index.
Gold price regained upside traction early Thursday despite a firmer US dollar. The US Treasury bond yields fell on uncertainty around the Federal Reserve’s interest rate outlook and as a result, gold price traded back above $1,960. Investors turned risk-averse after China’s property market concerns resurfaced, following the release of disappointing Chinese Fixed Asset Investment data.
From a technical perspective, the 21-day Simple Moving Average (SMA) at $1,975 remains a tough nut to crack for gold buyers. However, the 14-day Relative Strength Index (RSI) remains above the midline, keeping gold buyers hopeful. Daily closing above the 21-day SMA at $1,975 is needed for a sustained upside towards the November 6 high of $1,993, above which the $2,000 mark will be retested.
On the other side, retracement from higher levels are likely to challenge initial demand around $1,960, below which the $1,950 psychological level will be tested. The 200-day SMA at $1,936 could offer strong support to gold optimists.
