Gold price surges by Rs300/10gm

ISLAMABAD: The gold prices came down ahead of the outcome of the Federal Open Market Committee (FOMC) meeting on Wednesday, after hitting the highest level since November 19 a day earlier.
As of 1340 hours GMT, gold in the international market was available at $1,844.60 per ounce, shedding $3.30. Mixed clues ahead of the FOMC meeting along with concerns over Russia-Ukraine tension also underpinned the yellow metal’s safe-haven demand. Moreover, strong US Treasury bond yields and expectations for a faster policy tightening by the Fed continued underpinning the US dollar, which acted as a headwind for gold.
The price of 10 grams of yellow metal in Pakistan, meanwhile, increased to Rs104,700 after gaining Rs300. Gold in the local market was available at Rs104,400 on Tuesday. An increase in the local gold prices was due to 0.15 percent depreciation of Pakistani rupee against the US dollar during the day. Moreover, the overnight increase in the gold prices in the international market when the local market was closed also impacted local prices positively.
The pullback in the international gold prices could be attributed to some repositioning trade ahead of the FOMC meeting. It is worth recalling that the markets have fully priced in an eventual Fed lift-off in March and expect a total of four hikes in 2022. Hence, investors will look for fresh clues over the likely timing of when the US central bank will commence its policy tightening cycle. This, in turn, will play a key role in determining the next leg of a directional move for the non-yielding gold.
From a technical perspective, the emergence of some dip-buying near the $1,836 supports prospects for additional near-term gains. A convincing breakthrough above $1,854 would be seen as a fresh trigger for bullish traders and pave the way for an extension of the recent move up witnessed over the past one month or so.
On the flip side, any meaningful slide might still be seen as a buying opportunity near the $1,830 region. A convincing break below might prompt some technical selling and accelerate the fall towards the $1,812 zone. This is followed by the very important 200-day SMA, currently around $1,805. – TLTP