ISLAMABAD
Gold prices fell for the fourth consecutive day on Monday amid firmer US Treasury bond yields and stronger dollar.
As of 1315 hours GMT, gold in the international market was available at $1,789.80 per ounce, shedding $1.80. The release of the Federal Reserve latest policy statement triggered a jump in the US Treasury bond yields and the dollar, dimming appetite for non-yielding gold. International gold prices dropped around 3 percent in three days.
The price of 10 grams of yellow metal in Pakistan, meanwhile, decreased to Rs101,700 after shedding Rs200. Gold in the local market was available at Rs101,900 on Saturday last. A relatively higher decrease in the local gold prices was also due to a little appreciation of the rupee against the US dollar during the day.
The dollar rally caused by the Fed’s plans to increase interest rate by 50bps in March, gave a boost to the treasury bond yields and caused gold to fall sharply. The benchmark 10-year US Treasury bond yield rose more than 5 percent and reclaimed 1.8 percent level. Moreover, reports about recovery in the US economy and a rise in the Core Personal Consumption Expenditures (PCE) Price Index are also supporting the dollar and forcing gold to extend its downward slide.
From a technical perspective, the Relative Strength Index (RSI) is still below the midline but not at the oversold level, MACD signals are bearish and the downside bias appears well in place. Defending the daily lows of $1,786 is critical for gold bulls, below which a fresh downside could kick in towards $1,782. The next stop for sellers is seen at the pivot point one-month S1 of $1,779. The next level of support lies at $1,770 and a daily close below this level will open the door for further losses till $1,753.
On the flip side, the gold price is battling strong resistance around $1,791. The next resistance is seen at $1,796, the SMA100 one-day. A sustained move above the latter will see a test of a dense cluster of healthy resistance levels around $1,800.Further up, gold buyers will then aim for a powerful barrier at $1,806, which is the SMA200 one-day.
