Daily Times

Continuing with winning streak for the second consecutive week (+0.53 percent), gold seems to remain range-bound in the near-term.

Gold in the international market opened at $1,799.70 per ounce on Monday last and closed at $1,809.20 on the last session of the week, showing the highest close since November 19. Gold finished slightly below $1,810 after rebounding from $1783 during the week. However, it failed to hit fresh monthly highs during the week.

The price of 10 grams gold in Pakistan increased from Rs103,000 to Rs103,550 during the last week, up by 0.53 percent. The appreciation in local and international gold prices remained almost the same as the rupee’s depreciation against the US dollar during the week slowed down. The US dollar appreciated from Rs178.04 to Rs178.14 during the aforementioned period.

According to experts, the signs that the Omicron variant might be less severe than feared remained supportive of a generally positive risk tone and undermined gold. Investors turned optimistic after reports indicated that the current vaccines may be more effective than first thought in fighting the Omicron variant. Moreover, studies suggested reduced risks of hospitalisation and severe disease in people infected with Omicron compared with the Delta strain.

Meanwhile, the risk-on mood, along with the Federal Reserve hawkish outlook, pushed the yield on the benchmark 10-year US government bond closer to the 1.50 percent threshold. This further acted as a headwind for the non-yielding yellow metal. It is worth recalling that the Fed announced that it would double the pace of tapering to $30 billion per month.

On the flip side, the immediate short-term support could be seen at $1,800 psychological level, and $1,793 followed by the 20-day simple moving average at $1,784. A daily close under $1780 could anticipate more losses and a potential slide to $1750.