ISLAMABAD: Gold price in the country snapped a four-week losing streak and surged by Rs2,100 (-0.98 percent) per tola due to a rise in prices in the international markets due to geopolitical tensions.
The gold rate for a single tola of 24-karat increased to Rs216,000 from Rs213,900 during the week, according to the data shared by the All Sindh Sarafa Jewellers Association.
Similarly, the price of 10 grams of 24-karat gold closed the week at Rs185,185 against Rs183,385 at the start of the week, reflecting an uptick of Rs1,800. Following suit, the price for 10 grams of 22-karat gold surged to Rs169,753 Rs168,103 at the end of the week, reflecting an uptick of Rs1,650.
In global markets, gold closed the week at $2,039.70 per ounce against $2,018.80 in the preceding week, showing a week-on-week gain of $20.90 (+1.04 percent).
The Pakistani rupee continued making slight gains against the US dollar for the 12th week in a row and improved by Rs0.18 (+0.06 percent week-on-week. Since gold is denominated in the US dollars,when the local unit appreciates against the greenback, the value of gold in the local market decreases if all other factors remain the same. A minor difference in gold value’s appreciation in the local and international markets is due to appreciation of the local unit against the greenback during the week under review.
During the week under review, gold gathered bullish momentum and climbed to its highest level since early January above $2,060 before erasing a majority of weekly gains on Friday. Comments from Federal Reserve (Fed) officials could impact the precious metal’s valuation this week in the absence of high-tier macroeconomic data releases.
Gold benefited from escalating geopolitical tensions and retreating US yields to start the week, gaining more than 0.5 percent on Monday. News of a drone strike on a US base near Jordan’s border with Syria killing three and injuring more than 20 troops revived fears over a deepening crisis in the Middle East.
Ahead of the Federal Reserve’s (Fed) policy announcements, gold remained relatively calm on Tuesday but managed to close in positive territory. On Wednesday, the Fed left the policy rate unchanged at 5.25-5.5 percent as expected. The initial reaction to the Fed’s decision caused the US dollar to come under bearish pressure and helped gold price edge higher.
The US treasury bond yields turned south on Thursday and lost more than 2 percent and dropped to its lowest level since late December below 3.9 percent, helping gold price to rise above $2,060. On Friday, Gold turned south and erased the majority of its weekly gains following the January jobs report.
From a technical perspective, the Relative Strength Index (RSI) indicator on the daily chart retreated to 50 after advancing to 60, highlighting a loss of bullish momentum. The 20-day and 50-day Simple Moving Averages form a pivot point for gold price at around $2,030. On the upside, $2,060 (static level) aligns as first resistance before $2,080 (static level) and $2,100 (psychological level).
On the flip side, if gold falls below $2,030 and confirms this level as resistance, technical sellers could take action. In this scenario, $2,020 could be seen as first support before $2,000 (psychological level) as second support. – TLTP