ISLAMABAD
Gold price decreased by Rs300 per tola in the local market on Wednesday, following an overnight dip in prices in the international markets.
According to the data provided by Karachi Sarafa Association, the price for one tola of 24-karat gold decreased to Rs216,100 from Rs216,400. Similarly, the price for 10 grams of 24-karat gold decreased to Rs185,271 from Rs185,528, showing a dip of Rs257. Similarly, the price for 10 grams of 22-karat gold decreased to Rs169,832 from Rs170,067, down by Rs235.
Gold price in the country declined by Rs2,000 (-0.91 percent) last week. The gold rate for a single tola of 24-karat decreased to Rs218,000 from Rs220,000 last week, according to the data shared by All Pakistan Gems and Jewellers Sarafa Association (APGJSA). Overall, the gold price increased by Rs2,400 per tola in the previous four weeks.
On the other hand, as of 1230 hours GMT, gold futures in the international market were available at $2,034.20 per ounce, showing an increase of $5.40. Out of the $5.40 increase, +$2.20 was due to weakening of the US dollar and +$3.20 was due to predominant buyers, according to the Kitco Gold Index.
Simmering geopolitical tensions in the Middle East and increased cautiousness ahead of Thursday’s US inflation report kept investors away from riskier assets, scurrying for safety in the gold price, as the US dollar struggled to capitalize on the downbeat mood. The US Treasury bond yields also stayed directionless, with the benchmark 10-year bond yields at around the 4.0 percent level.
Houthi militants launched the largest attack to date on commercial merchant vessels on Tuesday. Further, investors call for prudence, as markets keenly await the critical US Consumer Price Index (CPI) data on Thursday to gauge the pace and timings of the US Federal Reserve (Fed) interest rate cuts later this year. The US CPI is expected to rise at an annual pace of 3.2 percent in December, up slightly from a 3.1 percent increase in November.
From a technical perspective, gold price is likely to maintain its side-ways momentum so long as it remains confined between the 21-day Simple Moving Average (SMA) and the 50-day SMA at $2,045 and $2,015 respectively. The 14-day Relative Strength Index (RSI) indicator sits just beneath the midline. If the rebound sustains, the immediate resistance is seen at the 21-day SMA at $2,045. The next bullish target for gold price is envisioned at Friday’s high of $2,054, above which doors reopen for a test of the $2,100 barrier.
On the downside, the initial support is seen at the $2,015 confluence, where the 50-day SMA and Monday’s low coincide. A daily closing below the latter is critical to resuming the downtrend towards the $2,000 mark.
