ISLAMABAD: Gold prices in the local market fell by Rs1,900 a tola on Monday due strengthening rupee against the US dollar and a dip in international bullion prices.
According to Karachi Sarafa Association, the price of one tola of 24-karat gold decreased to Rs200,100 from Rs202,000. Similarly, the gold price for 10 grams of 24-karat gold decreased to Rs171,553 from Rs173,182. Following suit, the price for 10 grams of 22-karat gold decreased to RsRs157,257.
It is important to mention that in a bid to enhance transparency within the gold market, the State Bank of Pakistan has now authorised all gold dealers to calculate domestic bullion rates using the interbank exchange rate. Moreover, the Federal Ministry of Industries and Production has established a 15-member advisory council that will review existing policies related to the gold trade, standards, certification, and value addition.
On the other hand, as of 1250 hours GMT, gold futures in the international market were available at $1,918.90 per ounce, showing a decrease of $13.60. Out of the $13.60 decrease, +$5.05 was due to weakening of the US dollar and -$18.65 was due to predominant sellers, according to the Kitco Gold Index.
From a technical perspective, any subsequent decline is more likely to find decent support near the $1,900 round-figure mark. The said handle coincides with the 100-day Simple Moving Average (SMA) and should now act as a key pivotal point. A convincing break below could make the gold price vulnerable to test the next relevant support near the $1,868 horizontal zone before dropping to the $1,860-1,855 region.
On the flip side, bulls might now wait for some follow-through buying beyond Friday’s swing high, around the $1,932-1,933 zone, before placing fresh bets. The gold price might then accelerate the momentum towards the $1,945-1,947 heavy supply zone. A sustained strength beyond the latter will be seen as a fresh trigger for bulls and pave the way for a further appreciating move. – TLT