Daily Times

Gold prices slipped after jumping to fresh eight-month highs of $1,914 per ounce in a two-way price move amid the Russian-Ukraine crisis. As of 1255 hours GMT, gold in the international market was available at $1,898.70 per ounce, shedding $4.50. Out of a $4.50 per ounce decrease, +$3.40 was due to the dollar’s weakness and -$7.90 was due to predominant sellers.

The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs107,800 after gaining Rs400. Gold in the local market was available at Rs107,400 on Monday last. The increase in local prices was due to overnight increase in the commodity’s price in the global market when the local market was closed. Moreover, rupee’s depreciation against the US dollar during the day also impacted local gold prices negatively.

Gold witnessed an intraday pull-back from the fresh multi-month high as modest strength in the US dollar undermined the commodity amid a recovery in the global equity markets. Gold struggled to capitalise on its early modest gains to the highest level since early June 2021 and witnessed an intraday turnaround from the $1,914 region. The sharp pullback could be attributed to some profit-taking amid a pickup in demand for the US dollar, which tends to undermine the dollar-denominated commodity.

Moreover, modest recovery in the equity markets exerted additional downward pressure on the safe-haven precious metal. The market nervousness over the worsening Ukraine crisis eased after the Russian envoy to the United Nations, Vasily Nebenzya, said that they remain open to a diplomatic solution. That said, the risk of a further escalation in tensions between Russia and the West over Ukraine should act as a tailwind for gold and help limit any further losses.

From a technical perspective, the 14-day Relative Strength Index (RSI) is sitting just beneath the overbought territory that prompted traders to lighten their bullish bets. Hence, any subsequent decline might still be seen as a buying opportunity near the $1,888-$1,887 region. A firm break below this level will open up the further downside towards Tuesday’s high of $1,880. The $1,850 support area will be back on sellers’ radars should the correction gather steam.

On the flip side, bulls might now wait for some follow-through buying beyond the June 2021 high of $1,917 region before placing fresh bets. Gold may then accelerate the momentum and climb to the next relevant hurdle near the $1,930-$1.932 area. Monitoring Desk