ISLAMABAD
Gold prices in the local market built on the previous upsurge and surged by Rs2,200 per tola on Friday as the US Treasury bond yields remained undermined, helping gold price buoy in the global markets.
According to the Karachi Sarafa Association, the price of one tola of 24-karat gold increased to Rs216,500 from Rs214,300. Similarly, the gold price for 10 grams of 24-karat gold increased to Rs185,614 from Rs183,728, showing an increase of Rs1,886.
This surge in gold price came despite Pakistani rupee recorded gains against the US dollar in the inter-bank and open markets for the second straight session. Rupee’s appreciation makes gold cheaper for local buyers if all other factors remain the same as gold is rated in US dollars. During the last five sessions, gold prices in the local market have increased by Rs5,500 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 1225 hours GMT, gold futures in the international market were available at $1,988.30 per ounce, showing an increase of $7.50. Out of the $7.50 increase, +$3.45 was due to weakening of the US dollar and +$4.05 was due to predominant buyers, according to the Kitco Gold Index.
Gold price consolidated the weekly gains and is set to snap a two-week losing streak. Falling US Treasury bond yields aided the gold price uptrend, but the resurgent US dollar could check the bright metal’s bullish momentum. Resurfacing US-China trade worries and uncertainty around the US Federal Reserve’s (Fed) interest rate outlook are keeping investors on the edge.
China’s Commerce Minister expressed concern over US curbs on semiconductor exports to China, as well as sanctions on Chinese firms and tariffs on Chinese imports during his meeting with the US Commerce Secretary Gina Raimondo on Thursday.
From a technical perspective, gold prices stormed through the 21-day Simple Moving Average (SMA) at $1,974 while the 14-day Relative Strength Index (RSI) held comfortably above the midline, supporting the bullish bias. The next upside barrier is seen at the descending trendline resistance of $1992, close to the November 6 high of $1,993. Acceptance above the latter will prompt gold buyers to challenge the $2,000 mark.
On the other hand, if gold sellers barged in, the initial support is aligned at the 21-day SMA at $1,974, below a sharp drop towards 1,960 cannot be ruled out.
