Daily Times

Gold prices surged to eight-month high on Thursday as markets are seeing a fresh risk-off wave once again after the Russia-Ukraine crisis resurfaces.

As of 1340 hours GMT, gold in the international market was available at $1,897.90 per ounce, gaining $28. Out of $28 per ounce decrease, +$0.60 was due to the dollar’s weakness and +$27.40 was due to predominant sellers. The price of 10 grams of yellow metal in Pakistan, meanwhile, surged to Rs107,300. Gold in the local market was available at Rs105,000 per 10 grams on Wednesday. According to experts, Russia-Ukraine crisis weighed on the risk sentiment and benefitted gold. They said that a flood of contradicting headlines amid intensifying Russia-Ukraine conflict continued weighing on investors’ sentiment, which was evident from a generally weaker tone around the equity markets. This, in turn, was seen as a key factor that underpinned the safe-haven gold.

They said that technical buying above the $1,877-$1,879 region further contributed to the strong move up. The spot prices are at the highest level since June 2021. The risk-off impulse led to a sharp pullback in the US Treasury bond yields, which provided an additional boost to the non-yielding gold.

From a technical perspective, the Relative Strength Index (RSI) on the daily chart holds well above the central line, suggesting that the bullish potential remains intact. However, RSI has moved on the verge of breaking into the overbought territory and warrants some caution before positioning for any further appreciating move. Hence, momentum beyond the $1,900 mark is more likely to confront stiff resistance and remain capped near the $1,908-$1,910 region. This should act as a key pivotal point, which if cleared will set the stage for an extension of the upward trajectory.

On the flip side, the $1,879-$1,877 region now seems to protect the immediate downside ahead of the $1,870-$1,868 support zone. Any further decline would still be seen as a buying opportunity near an eight-month-old descending trend-line resistance breakpoint, around the $1,856-$1,855 zone. The latter should act as a strong base for gold, which if broken decisively might prompt some long-unwinding trade.