Gold jumps by Rs1,700 per 10gm amid demand


ISLAMABAD: Gold price jumped 1.4 percent as escalation of the Russia-Ukraine conflict generates high demand for the yellow metal.
As of 1410 hours GMT on Monday, gold in the international market was available at $1,914.80 per ounce, gaining $25.80. Out of $25.80 per ounce increase, -$6.2 was due to the dollar’s strengthening and +$32 was due to predominant buyers.
The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs109,400 after gaining Rs1,700. Gold in the local market was available at Rs107,700 on Friday last. The local prices also increased due to depreciation of the Pakistani rupee against the US dollar.
The gold price surged to $1,930 as trading began; however, it trimmed some gains later. Gold is in demand as a safe haven in this environment, as is also evident from the exchange trade fund (ETF) inflows. Besides ETF investors, speculative financial investors amplified the upswing in the gold price.
The incoming headlines surrounding the Ukraine crisis continued weighing on investors’ sentiment, which, in turn, acted as a tailwind for the safe-haven gold. The market nervousness, however, eased a bit after the Russian negotiator said that they are interested in reaching an agreement with Ukraine as soon as possible. This was seen as a key factor that exerted some intraday downward pressure on gold. Moreover, the emergence of fresh US dollar selling at higher levels helped limit any meaningful slide for the dollar-denominated commodity.
From a technical perspective, the Relative Strength Index (RSI) is trading slightly higher above the midpoint, suggesting that bullish bias is intact. Bulls face first resistance at $1,927. If this level is crossed, $1,939 will challenge the bulls.
On the flip side, a drop back below the 21-Simple Moving Average (SMA) at $1,909 will call for a test of the fierce support around the $1,900 mark. Further south, last Thursday’s low of $1,878 will be back on sellers’ radars. – TLTP