Daily Times

After closing the last week on a positive note at $1,819 per ounce in the international market, with a gain of $33.90 (+1.9 percent) on a week-on-week basis, gold is expected to remain slightly bearish in the near term.

Similarly, the price of gold increased by 0.71 percent in Pakistan during the last week. The price of 10 grams of yellow metal in Pakistan was Rs98,700 at the opening of the last week and it increased to Rs99,400 to close the week.

The difference in appreciation in gold price in the local and international markets was due to appreciation of the local currency, which appreciated by 0.96 percent against the US dollar during the week, with the dollar opening at Rs171.65 on Monday last and closing at Rs170.01 on Friday last.

According to experts, improvement in the rupee kept the gold price in check. They said that weakening of the dollar and the drop in the international bullion market had a dual impact on the gold price in Pakistan. They stated that the relatively lower increase in the gold price came in reaction to the facilities offered by Saudi Arabia.

According to experts, gold hit two-month highs, slightly above the October high at $1813.85. With spot prices now up over $26 on Friday, that marks an impressive more than $50 turn-around from previous weekly lows around the $1790 mark set on Wednesday. If prices can manage a clean break above the October highs, that could open the door to an extension of gains towards the next key area of support, a quadruple top in the low $1830s that gold was unable to get above despite multiple tests in July, August and September.

A sharp decline in long-term US government borrowing costs, which reduces the opportunity cost of holding precious metals, thus incentivising market participants to invest, has been the major fact driving the gains on Friday, as was also the case on Thursday when the precious metal recovered sharply from weekly lows. Gold closed above the 200-day and the 100-day SMAs for the second straight day on Friday. Additionally, the Relative Strength Index (RSI) indicator on the daily chart rose above 50, confirming the bullish shift in the near-term outlook.

According to experts, the investors will keep a close eye on US Treasury bond yields. Currently, the 10-year yield is below 1.5 percent and unless it manages to rebound above that level, gold could continue to push higher. On the other hand, gold could lose interest in case the 10-year yield reclaims 1.6 percent and steadies above that level.

It is pertinent to mention here that TLTP Research Wing predicted on October 31 that gold was expected gold to remain slightly bullish in the near term.