ISLAMABAD
Gold price in the country snapped a six-session losing streak and increased by Rs2,500 per tola on Monday, toeing an uptick in the price of the yellow metal in the international market.
According to the data provided by the Karachi Sarafa Association, the price for one tola of 24-karat gold increased to Rs240,500 from Rs238,000. Similarly, the price for 10 grams of 24-karat gold increased to Rs206,190 from Rs204,047, showing an increase of Rs2,143. Following suit, the price for 10 grams of 22-karat gold increased to Rs189,007.
In the last six sessions, gold price per tola reduced by Rs6,400 per tola in Pakistan, taking the cumulative loss over the past two weeks to Rs14,200 (-5.63 percent) per tola. However, the gold price in the country surged by Rs7,100 per tola in April. It may be noted that the gold price hit an all-time high in Pakistan on April 20 when it reached Rs252,200. Earlier gold price per tola in Pakistan hit all-time highs of Rs251,900 on April 17, Rs247,300 on April 16 and Rs247,600 on April 9.
On the other hand, gold futures in the international market as of 132o hours GMT on Monday, were available at $2,324.40 per ounce, showing an uptick of $23.20. Out of the $23.20 increase, $3.75 was due to weakening of the US dollar and $19.45 was due to predominant buyers, according to the Kitco Gold Index.
Retreating US Treasury bond yields after weaker-than-expected US employment data and escalating geopolitical tensions helped the gold price stretch higher and snap the two-day losing streak in the international market. The weaker-than-expected US employment reports have boosted the odds of a September rate cut from the US Federal Reserve (Fed). This, in turn, has dragged the US dollar lower and lifted the USD-denominated gold. It’s worth noting that a lower interest rate can decrease the opportunity cost of investing in gold, leading to higher demand and price.
On the other hand, the easing fear of geopolitical tensions in the Middle East, particularly the Iran-Israel conflict and the risk-on environment might undermine demand for safe-haven assets and cap the yellow metal’s upside.
From a technical perspective, the bullish outlook of the precious metal remains intact, as the price is above the key 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index hovers around the 50 midline, indicating indecisiveness among market players.
The first upside barrier for the yellow metal is seen at the $2,350–$2,355 region. A bullish breakout above this level will expose the $2,400 mark en route to an all-time high near $2,432. On the downside, any follow-through selling below the $2,300 psychological mark will see a drop to a low of May 3 at $2,275.
