ISLAMABAD: Gold price in the country decreased by Rs2,200 (1 percent) per tola on a week-on-week basis after surging by Rs5,500 in the preceding week, following rupee’s appreciation against the US dollar.
The gold rate for a single tola of 24-karat on a week-on-week (WoW) basis decreased to Rs215,800 from Rs218,000, according to different local gold markets. Similarly, the gold rate for 10 grams of 24-karat decreased to Rs185,020 from Rs186,900 a week ago, showing a decline of Rs1,880. Likewise, 10 grams of 22-karat gold were being traded for Rs170,068 against Rs171,324 during the previous week while price of a single tola of 22-karat gold decreased to Rs198,365 from Rs199,832 on a week-on-week basis.
It is to be noted that local bullion pricing bodies, Karachi Sarafa Market and All Pakistan Gems and Jewelers Association, have refrained from announcing daily commodity prices since September 13 and the prices quoted above are being collected from different markets. This decision follows a crackdown on alleged betting and smuggling activities by certain institutions. This is sparking speculation about potential actions against gold smugglers or a downward trend in the country’s precious metal market, leading to silence from the pricing body. It is worth noting that in the absence of official gold rates, consumers at jewelry shops are experiencing a state of confusion.
Meanwhile, the Pakistani rupee extended gains against the US dollar for the third consecutive week and appreciated by 1.71 percent in the interbank market and 1.68 percent in the open market. Since gold is denominated in the US dollars and when the local unit appreciates against the greenback, the value of gold in the local market usually falls.
In global markets, gold closed the week at $1,924.80 per ounce against $1,924.10 in the preceding week, showing a week-on-week increase of $0.70 (+0.04 percent).
Gold price started the week on a bullish note and climbed to its highest level since early September near $1,950 before reversing its direction in the second half of the week. Pressured by rising US Treasury bond yields, the gold price dropped below $1,920 on Thursday. Nevertheless, the yellow metal regained traction ahead of the weekend and ended the week virtually unchanged with a minor weekly gain of $0.70.
From a technical perspective, gold’s near-term outlook highlights indecisiveness. Gold fluctuated around the $1,920-$1,925 area in the second half of the week, where the 20-day, 50-day and the 200-day simple moving averages (SMA) converge. Moreover, the relative strength index (RSI) indicator returned to 50 on Friday after fluctuating between 40 and 60 earlier in the week, confirming the lack of directional momentum.
On the upside, $1,940 (100-day SMA) aligns as immediate resistance before $1,950. A daily close above the latter could attract technical buyers and open the door for another leg higher to $1,980 (static level). On the downside, if the gold price makes a sharp decline below $1,920 and confirms that level as resistance, the $1,900-$1,890 area could be set as the next bearish target before $1,875. – TLTP