ISLAMABAD: Gold prices remained on the defensive on Friday after going up for seven successive sessions amid the stronger US dollar and treasury bond yields.
As of 1300 hours GMT, gold in the international market was available at $1,974.80 per ounce, shedding $2.50 (-0.13 percent). Out of the $2.50 per ounce decrease, -$3.15 was due to strengthening of the US dollar and +$0.65 was due to predominant buyers, according to Kitco Gold Index.
The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs116,000 after gaining Rs1,000. Gold price in the local market settled at Rs115,000 on Thursday last. An increase in local gold prices was due to overnight change in the international prices when the local market was closed. Gold witnessed a strong rebound last night following a minor correction in the US dollar Index. Investors preferred the precious metal for parking their funds amid a long weekend due to the Easter holiday.
The US Treasury yields have recovered from their losses recorded in the last two trading sessions on the optimism of an aggressive tight policy by the Federal Reserve (Fed) in May. The 10-year US Treasury yields have reclaimed their three-year high at 2.83 percent after global banks hiked their critical policy rates by 50 basis points (bps). Elevation in policy rates by worldwide central banks raised hopes of mean reversion to neutral rates sooner rather than later.
From a technical perspective, the price continues to trade above all of its moving averages, with the 20 SMA slowly grinding higher above the longer ones. The bulls need a decisive close above $1,982 to kick start a fresh uptrend. Sustained strength beyond this resistance might trigger a short-covering move and push gold prices to an intermediate hurdle at $1,994, and if it is cleared, it should pave the way to break the psychological barrier of $2,000.
On the flip side, the gold price enjoys strong support at $1,966, which is Tuesday’s closing point. Next support level lies around $1,961. A daily closing below $1,948 could negate prospects for any further near-term appreciating move.
