ISLAMABAD: Gold price in the country registered a weekly increase of Rs1,200 (+0.56 percent) in line with an uptick in the international rate, after falling by Rs8,000 (-3.58 percent) per tola in the preceding week.
The gold rate for a single tola of 24-karat increased to Rs216,800 from Rs215,600, according to the data shared by Karachi Sarafa Association and All Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10 grams of 24-karat gold closed at Rs185,871 against Rs184,842 at the start of the week, reflecting an increase of Rs1,029.
With a premium of $20, the international rate of gold in the country closed at $2,040 per ounce as compared to $2,024 per ounce last week, showing an increase of $16 on a week-on-week basis.
The Pakistani rupee made gains against the US dollar for the fifth week in a row and improved by 61 paisas in the interbank market and 50 paisas in the open market. The local unit has improved by Rs3.77 during the previous five weeks in the interbank market. 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. As global gold prices remained on an upward trend during the week under review, the price of yellow metal went up relatively lower in the country during the week.
In global markets, gold closed the week at $2,019.90 per ounce against $2,004.50 in the preceding week, showing a week-on-week increase of $15.40 (+0.77 percent).
The previous metal appreciated in the wake of the Federal Reserve’s (Fed) dovish shift. In fact, the Fed signalled on Wednesday that it is done raising interest rates and the so-called “dot plot” indicated three 25 basis points (bps) rate cuts in 2024. This led to a further decline in the US Treasury bond yields and continued to undermine the US dollar. This, along with geopolitical risk and China’s economic woes, validated the positive outlook.
Gold prices booked a weekly advance, as the US dollar suffered heavily on Thursday. The greenback found some respite from an unexpected rise in the US Retail Sales data and falling jobless claims. But the US dollar reprieve emerged as temporary, as the dovish Federal Reserve outlook-led global risk-on rally smashed it’s once again, keeping gold price elevated near eight-day highs of $2,048. Looking ahead, the global PMI data will provide fresh trading impetus.
From a technical perspective, having extended Wednesday’s recovery above the key $2,040-$2,050 supply zone, gold prices failed to find a foothold above the latter on a daily closing basis on Thursday and Friday.
With the 14-day Relative Strength Index (RSI) indicator, however, still holding above the midline, the bullish potential appears intact for gold price so long as it defends the critical short-term 21-day Simple Moving Average (SMA) at $2,015. A sustained break below the latter will reopen floors toward a test of the $2,000 threshold, below which the 50-day SMA support at $1,980 will be back in play.
On the flip side, a daily close above the $2,040-$2,050 region is critical to unleashing additional gold price recovery towards the $2,100 psychological level. – TLTP