ISLAMABAD (TLTP): Snapping a four-week losing streak with 0.87pc surge on a week-on-week basis in the international market, gold’s outlook seems bullish.
The price of 10 grams gold in Pakistan increased from Rs102,000 to Rs103,000 during the last week, up 0.98 percent. The relatively higher appreciation in local gold price was mainly due to the rupee’s depreciation during the week. The US dollar appreciated from Rs177.71 to Rs178.04 during the aforementioned period.
According to experts, the gold price is riding higher on the hawkish central banks’ decisions and year-end flows. The US dollar and Treasury yields licked their wounds, lending support to the yellow metal. Gold fluctuated in a relatively narrow band during the first half of the week but slumped to its weakest level in two months at $1,753 per ounce on Wednesday. However, gold managed to stage a decisive rebound and broke above $1,800 per ounce on Friday. In the week starting today (Monday), gold is likely to find demand as a traditional safe haven if investors remain concerned over the potential negative impact of the Omicron variant on activity and inflation outlook.
On Wednesday, the US Bureau of Economic Analysis will release its final estimate of the third-quarter gross domestic product (GDP). On Thursday, the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserves’ preferred gauge of inflation, will be looked upon for fresh impetus. These two data releases will impact the gold price. From a technical perspective, gold is trying hard to overcome the $1,808 barrier.
If the latter is scaled, then gold bulls will test minor resistance at $1,811. Further up, the rally could gain traction towards the $1,818 level. Alternatively, strong support awaits at the $1800 threshold, below which $1,794 will come to the rescue of gold bulls. The last line of defence for buyers is seen at $1,790.
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