ISLAMABAD
Gold prices in the local market remained unchanged on Thursday following a gain of Rs2,600 per tola in previous session, as the international bullion prices retreated after nearing a seven-month top.
According to Karachi Sarafa Association, the price of one tola of 24-karat gold remained unchanged at Rs221,000. Similarly, the price for 10 grams of 24-karat gold remained stable at Rs189,472. Similarly, the price for 10 grams of 22-karat gold closed unchanged at Rs173,683.
The Pakistani rupee inched up against the US dollar in the inter-bank market for the third straight day and appreciated by 22 paisas to 285.17.
In the open market, the local unit shed Re1 to reach 284 for buying and 287 for selling.
Rupee’s appreciation makes gold cheaper for local buyers only if all other factors remain the same as gold is rated in US dollars.
On the other hand, as of 1205 hours GMT, gold futures in the international market were available at $2,036.90 per ounce, showing a decrease of $5.70. Out of the $5.70 decrease, -$9.10 was due to strengthening of the US dollar and +$3.40 was due to predominant buyers, according to the Kitco Gold Index.
The traders seemed reluctant and prefered to wait for the key inflation reading from the United States before placing fresh directional bets. The US Personal Consumption Expenditures (PCE) Price Index was due for release later in the day and might influence the Federal Reserve’s next policy move. This, in turn, will drive the US dollar demand and provide some meaningful impetus to the non-yielding yellow metal. Apart from this, a positive tone around the US equity futures acted as a headwind for the safe-haven gold price. This, along with China’s economic woes, lent some support to the gold price.
From a technical perspective, the Relative Strength Index on the daily chart is holding above the 70 mark, pointing to slightly overbought conditions and holding back bulls from placing fresh bets. That said, any meaningful corrective slide is more likely to attract fresh buyers near the overnight swing low, around the $2,035 region. This is followed by support near the $2,020 area and the $2,010-$2,008 strong horizontal resistance breakpoint.
On the flip side, the multi-month peak, around the $2,052 area touched on Wednesday, now seems to act as an immediate hurdle for the gold price. A sustained strength beyond should allow bulls to aim back towards challenging the all-time high, around the $2,079-2,080 zone set in May.
