ISLAMABAD: The gold prices remained flat in the international market on Friday despite an increase in the US Treasury yields. Gold in the international market was available at $1,810.20 per ounce as of 1310 hours GMT. The price of 10 grams of yellow metal in Pakistan, meanwhile, increased to Rs103,700 after gaining Rs100. The increase in local gold price was due to overnight change in the international prices, as the gold price surged at the end of the session a day earlier at a time when the local market was closed. The signs that the Omicron variant might be less severe than feared remained supportive of a generally positive risk tone and undermined the safe-haven gold. TLTP
Investors turned optimistic after reports indicated that the current vaccines may be more effective than first thought in fighting the Omicron variant. Moreover, studies suggested reduced risks of hospitalisation and severe disease in people infected with Omicron compared with the Delta strain.
Meanwhile, the risk-on mood, along with hawkish outlook of the US Federal Reserve pushed the yield on the benchmark 10-year US government bond closer to the 1.50% threshold. This further acted as a headwind for the non-yielding yellow metal.
Nevertheless, gold prices finally settled above the $1,800 mark – the highest close since November 19 – and recorded gains for the second straight week ahead of the Christmas holiday on Friday.
From a technical perspective, acceptance above the very important 200-day SMA and the $1,800 mark could be seen as a fresh trigger for bullish traders. Some follow-through buying beyond the $1,814-15 region will reaffirm the positive outlook and set the stage for additional gains. Gold would then accelerate the momentum towards challenging the $1,832-34 supply zone.
On the flip side, the $1,800 mark, closely followed by the $1,795 region (200-DMA) now seems to protect the immediate downside ahead of the $1,785 support zone. A convincing break below will negate the bullish bias and turn gold vulnerable to slide back to the $1,768-67 horizontal zone en-route the December swing low, around the $1,753 region.
