Daily Times

The gold prices inched down on Tuesday amid the Federal Open Market Committee (FOMC) meeting of the US Federal Reserve.

As of 1340 hours GMT, gold in the international market was available at $1,841.50 per ounce, shedding $1.70. Mixed clues ahead of the FOMC meeting along with concerns over Russia-Ukraine tension also underpinned the yellow metal’s safe-haven demand.

The price of 10 grams of yellow metal in Pakistan, meanwhile, increased to Rs104,400 after gaining Rs300. Gold in the local market was available at Rs104,100 on Monday. An increase in the local gold prices was due to 0.13 percent depreciation of Pakistani rupee against the US dollar during the day. Moreover, the overnight increase in the gold prices in the international market when the local market was closed also impacted local prices positively.

Gold struggled to capitalise on Monday’s positive move and oscillated a narrow trading band, around the $1,840 level. The US dollar drew some support from a rebound in the US Treasury bond yields and held steady near a two-week high touched a day earlier amid expectations that Fed will announce an increase in policy rate from March on Wednesday.

Investors refrained from placing aggressive directional bets and preferred to wait for the outcome of a two-day FOMC meeting. Though, a firmer US Treasury yields and downbeat equities keep gold buyers cautious after the metal failed to cross the key hurdle the previous week.

From a technical perspective, the 200-daily moving average (DMA) has crossed the 50-DMA for the upside, flashing a bearish signal. The $1,832 level seems to act as an immediate support and any pullback towards this level might be seen as a buying opportunity. A convincing break below might prompt some technical selling and accelerate the fall towards the $1,812. The next relevant support is pegged near the very important 200-day SMA, currently at $1,804, ahead of the $1,800 round figure.

On the flip side, bulls need to retest the two-month’s and last week’s highs – $1848 – before it prepares to take on the November 22 high of $1,849. Daily closing above that level could initiate a fresh uptrend in gold price. The next resistance level lies around $1,860 and some follow-through buying will be seen as a fresh trigger for bullish traders.