ISLAMABAD: Gold price tanked on Tuesday amid strengthening dollar as the US treasury bond yield hit monthly high of 1.667 percent.
Gold in the international market was available at $1,789.70 per ounce after shedding $15.80 at 1645 hours GMT. Meanwhile, the price of 10 grams of yellow metal in Pakistan decreased to Rs100,700 with a decrease of Rs2,900. Gold in the local market was available at Rs103,600 per 10 grams on Monday last.
The relatively higher decrease in the gold price in the local market was due to appreciation of the Pakistani rupee against the US dollar, as the local unit recovered 47 paisas against the greenback during the day. Moreover, the international gold prices went down overnight when the local market was closed.
According to experts, gold remains vulnerable to additional downside momentum. They said the recent US dollar rally got a strong boost on Monday after the US president nominated Jerome Powell to serve as the Fed chairman for a second term. The fact that investors considered the other leading candidate, Lael Brainard, to be the more dovish of the two, the announcement reinforced bets for higher US interest rates. This, in turn, pushed the USD Index to a 16-month peak and prompted aggressive selling around the dollar-denominated gold.
From a technical view, any subsequent fall below the current mark will suggest that gold has topped out in the near term and pave the way for a slide to the next relevant support near $1,770. The next level of support lies near $1,763. On the flip side, the daily swing high, around the $1,812-13 region, now seems to act as an immediate resistance ahead of the $1,825-26 area. Some follow-through buying has the potential to lift spot prices beyond the $1,832-34 static hurdle, towards testing the $1,850 resistance zone. – TLTP