Gold hits Rs115,300 per 10gm as safe-haven demand shines

0
57

ISLAMABAD
Gold price surged almost one percent on Monday as demand for traditional safe-haven shines amid raging energy inflation and its impact on global economic growth.
As of 1215 hours GMT, gold in the international market was available at $1,989.20 per ounce, gaining $16.30. Out of a $16.30 per ounce increase, -$10 was due to the dollar’s strengthening and +$26.30 was due to predominant buyers, according to Kitco Gold Index.
The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs115,300 after gaining Rs1,900. Gold in the local market was available at Rs113,400 on Friday last. The local prices increased due to increase in gold prices internationally as well as depreciation of the Pakistani rupee against the US dollar during the day.
Geopolitics is the primary market driver, as investors remain focused on the Russia-Ukraine crisis, and the risk perception is likely to continue to impact gold’s market valuation. The Russia-Ukraine crisis has revived gold’s demand as a safe haven, as the yellow metal has breached its highest level since September 2020, which was $1,974 per ounce. All this is happening at a time when the US dollar’s strength is at a multi-year high as the US Federal Reserve has hinted at the possibility of a 50 basis points rate hike in the current month. As the Ukrainian crisis deepens, the market sentiment remains roiled, facing a double whammy from soaring oil prices.
From a technical perspective, the Relative Strength Index (RSI) is holding well above the midline, adding credence to a potential move higher. With the bullish breakout, gold price is positioned to retest the first resistance at $1,995. The next levels of resistance are $1,998 and $2,001.
On the flip side, the immediate cushion is seen at $1,982, below which a sharp sell-off could be triggered towards the powerful cap of $1,975, which is the previous month’s high. A firm break below the latter could fuel a fresh down-swing towards $1,972.