ISLAMABAD: Gold prices in the local market increased by Rs900 per tola on Wednesday following a surge in the international bullion prices.
According to the Karachi Sarafa Association, the price of one tola of 24-karat gold increased to Rs216,500 from Rs215,600. Similarly, the gold price for 10 grams of 24-karat gold increased to Rs185,614 from Rs184,848, with an uptick of Rs766.
The Pakistani rupee recorded gains against the US dollar in the inter-bank and open markets for the fifth straight session. Rupee’s appreciation makes gold cheaper for local buyers if all other factors remain the same as gold is rated in US dollars. During the last week, gold prices in the local market increased by Rs5,500 per tola.
On the other hand, as of 1120 hours GMT, gold futures in the international market were available at $2,000.80 per ounce, showing an increase of $3.10. Out of the $3.10 increase, -$2.10 was due to strengthening of the US dollar and +$5.20 was due to predominant buyers, according to the Kitco Gold Index.
Gold price is trying hard to sustain the previous bullish momentum early Wednesday, trading around the $2,000 barrier, awaiting a fresh batch of key US economic data releases for fresh hints on the US Federal Reserve’s interest rate outlook. The US dollar attempted a recovery amid a pause in the US Treasury bond yield sell-off and a souring market mood. Markets have turned jittery due to the uncertainty on the global interest rate outlook, especially after the recent commentaries from the European Central Bank (ECB) and the Bank of England (BoE) were perceived as hawkish by market participants, overshadowing the dovish Fed expectations.
From a technical perspective, gold price has charted a bull cross on daily sticks after the 50-day Simple Moving Average (SMA) closed above the 100-day SMA on Tuesday last. The 14-day Relative Strength Index (RSI) is holding well above the midline, suggesting that the bullish potential remains well in place and every pullback in gold price could be seen as a good buying opportunity. Daily closing above the $2,000 threshold could initiate a fresh advance toward the multi-month high of $2,009. The next upside target is envisioned at the mid-May high near $2,020.
On the other side, gold sellers need to crack the 21-day SMA at $1,975 to reinforce gold sellers toward the $1,955-$1,950 region. A sustained break below the last could threaten the November 14 low at $1,944, followed by the ascending 200-day SMA at $1,939. – TLTP