Daily Times

After closing the last week on a negative note at $1,783.60 per ounce in the international market following a decrease of $9.20 (-0.51 percent), gold is expected to remain slightly bearish in the near term.

The price of 10 grams of yellow metal in Pakistan decreased from Rs101,700 to Rs101,400 during the last week, showing a decrease of 0.29 percent. The difference in depreciation in gold price in the local and international markets was due to depreciation of the local currency against the US dollar, which depreciated by 0.75 percent against the greenback during the week, with the dollar opening at Rs175.46 on Monday last and closing at Rs176.77 on Friday last.

From a technical view, gold’s daily chart shows that Friday’s price action is forming a bullish engulfing candle pattern, with an upside implication; nevertheless, a daily close above $1,780 is necessary to confirm its validity. In that outcome, the first resistance would be the confluence of the 200, 50, and 100-day moving averages (DMAs) lying at $1,791.01, $1791.41, and $1,790.63, respectively. A breach of the latter could propel gold prices higher due to the importance of the $1,790-92 area. The next resistance would be the $1,800, followed by the September 3 high at $1,834.

On a flip side, the first support would be the December 3 cycle low at $1,761.99. The breach of the latter would expose crucial support levels, as the October 6 low at $1,745.72, followed by the September 29 low at $1,721.52.

During the last week, gold started the week under modest bearish pressure and closed in negative territory on Monday and Tuesday. Following an uninspiring recovery attempt toward $1,800 on Wednesday, gold struggled to hold its ground and touched its lowest level in a month at $1,761. Although the disappointing November jobs report from the US triggered a rebound initially on Friday, gold failed to attract buyers and finished the third straight week deep in the red.

Gold dominated the financial markets ahead of the weekend amid renewed fears over the omicron variant causing a slowdown in global economic activity. The market mood improved at the start of the week, however, with confirmed omicron cases in Europe and the UK showing mild symptoms, the yellow metal couldn’t find demand as a safe haven and US Treasury bond yields edged higher.

On Tuesday, markets, once again, turned risk-averse after the CEO of Moderna said that current vaccines were likely to be ineffective against the new variant and added that it would take “months before pharmaceutical companies can manufacture new variant-specific jabs at scale.” Gold managed to stage a decisive rebound and climbed above $1,800. However, FOMC Chairman Jerome Powell’s hawkish remarks provided a boost to the greenback and forced gold to erase its daily gains.