ISLAMABAD: Gold price fell for the second straight session on Wednesday in the local market by Rs2,000 per tola, following an overnight dip in prices in the international markets.
According to the data provided by All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price for one tola of 24-karat gold decreased to Rs215,300 from Rs217,300. Similarly, the price for 10 grams of 24-karat gold decreased to Rs184,585 from Rs186,300, showing a decrease of Rs1,715.
Similarly, the price for 10 grams of 22-karat gold decreased to Rs169,203 from Rs170,775, coming down by Rs1,572.
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 1230 hours GMT, gold futures in the international market were available at $2,027.90 per ounce, showing a slight uptick of $0.30. Out of the $0.30 increase, -$1.20 was due to strengthening of the US dollar and +$1.5 was due to predominant buyers, according to the Kitco Gold Index.
Gold price extended its correction as a hawkish commentary from Federal Reserve (Fed) Governor Christopher Waller cast doubts about a rate cut by the central bank in the March meeting. Fed policymakers have been favoring interest rates to remain higher for longer, defying market expectations, amid a lack of confidence in inflation returning towards the 2 percent target in a timely and sustainable manner.
The US Consumer Price Index (CPI) data for December indicated that the last leg of high price pressures is quite challenging for Fed policymakers, likely due to steady labor market conditions and decent consumer spending momentum. A quick rate cut decision by the Fed can lead to persistence in inflationary pressures and dampen the work done to achieve price stability.
From a technical perspective, gold price continued its downside below $2,030. The near-term demand for gold is not bullish anymore as price has dropped below the 20-day Exponential Moving Average (EMA), which traded around $2,036. The yellow metal has found interim support after sliding to near the 50-day EMA, which oscillated near $2,017. The 14-period Relative Strength Index (RSI) is declining towards 40, which could offer some cushion. However, a breakdown below the same will lead to the activation of bearish momentum. – TLTP