ISLAMABAD: Gold price increased by Rs450 per tola in the local market for the fourth consecutive session on Monday, following an uptick in prices in the international markets. According to the data provided by Karachi Sarafa Association, the price for one tola of 24-karat gold increased to Rs217,900 from Rs217,450. Similarly, the price for 10 grams of 24-karat gold increased to Rs186,814 from Rs186,428, showing an increase of Rs386. Similarly, the price for 10 grams of 22-karat gold increased to Rs171,246. The price of 24-karat gold increased by Rs950 per tola on Saturday. Earlier, gold price in the country declined last week by Rs550 per tola. It was the second consecutive week when the prices of the yellow metal decreased in the country. On the other hand, as of 1245 hours GMT, gold futures in the international market were available at $2,052.50 per ounce, showing an increase of $3.80. Out of the $3.80 increase, -$2 was due to strengthening of the US dollar and +$5.80 was due to predominant buyers, according to the Kitco Gold Index. TLTP
Gold price continued to enjoy decent demand as market participants seemed more convinced about the Federal Reserve (Fed) reducing borrowing costs from March after the release of the surprisingly soft Producer Price Index (PPI) numbers for December.
Investors expect that a decline in the prices of goods and services at their factory gates will eventually result in easing inflation pressures further. This also suggests that inflation in the US is progressively declining towards the 2 percent target.
Meanwhile, the appeal for gold has also improved due to escalating geopolitical tensions in the Middle East. US and the UK military have launched airstrikes targeting Houthis in retaliation for attacking commercial shipments of oil in the Red Sea. This has deepened fears of an escalating war in Gaza amid the potential participation of Iran in the Israel-Hamas war.
From a technical perspective, the 14-day Relative Strength Index (RSI) has shifted into the upper range of 60-80, which indicates that a bullish momentum is active. The broader appeal for gold is also bullish as short-to-long-term daily Exponential Moving Averages (EMAs) are sloping higher.
