Daily Times

Gold price in the country surged for the third consecutive week by Rs700 (+0.32 percent) in line with an uptick in the international rate; while the precious metal made a gain of around 14 percent in the year 2023 globally.

In the local market on week-on-week, gold price increased by Rs2,500 (+1.15 percent) and Rs1,200 (+0.56 percent) per tola in the preceding two weeks. The gold rate for a single tola of 24-karat increased to Rs220,000 from Rs219,300 during the week, according to the data shared by Karachi Sarafa Association and All Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10 grams of 24-karat gold closed at Rs188,615 against Rs188,072 at the start of the week, reflecting an increase of Rs543.

The Pakistani rupee continued making slight gains against the US dollar for the seventh week in a row and improved by 67 paisas in the interbank market and 50 paisas in the open market. Since gold is denominated in the US dollars, when the local unit appreciates against the greenback, the value of gold in the local market decreases if all other factors remain the same. As global gold prices remained on an upward trend during the week under review, the price of yellow metal went up relatively lower (o.32 percent) in the country during the week as compared to the global market (0.46 percent). In global markets, gold closed the week at $2,062.20 per ounce against $2,052.80 in the preceding week, showing a week-on-week increase of $9.40 (+0.46 percent).

From a technical perspective, gold price is likely to maintain its consolidation mode heading into the New Year, holding the higher ground. Having closed Friday below the rising trendline resistance, now at $2,084, gold buyers may be a bit cautious but the bullish 14-day Relative Strength Index (RSI) indicator continues to keep them hopeful. Acceptance above the latter is needed to convincingly take on the $2,100 barrier, above which a fresh uptrend towards the all-time high of $2,144 cannot be ruled out. If the gold price correction regains traction, initial support is seen at Wednesday’s low of $2,061. Further down, the $2,050 round figure could be tested. The last line of defense for Gold buyers is pegged at the 21-day Simple Moving Average (SMA) at $2,035.

Gold prices have been on a roller coaster over the past 3.5 years as prices have responded to the changing political and economic environment. With the US dollar posting its worst performance since 2020 against a basket of major currencies, gold futures ended 2023 with a nearly 14 percent gain. Despite challenges such as surging bond yields and a robust US dollar to begin 2023, gold prices demonstrated resilience throughout the year. Notably, in the face of the Federal Reserve’s decision to raise interest rates to a 22-year high. The two most significant events for gold demand in 2023 were the collapse of Silicon Valley Bank and the Hamas attack on Israel, which led to central banks buying record amounts of physical gold. Through the third quarter, central banks year-to-date bought 800 metric tons of gold, which is 14 percent higher than in the same period a year ago. Gold has historically performed well during periods of severe economic stress, geopolitical risks, and in periods of either inflation, deflation, or stagflation.