Daily Times

Gold price snapped a four-day winning streak on Wednesday, falling two percent amid positive statements from Ukraine and Russia.

As of 1200 hours GMT, gold in the international market was available at $2,013.40 per ounce, shedding $39.20. Out of a $39.20 per ounce decrease, +$10.50 was due to the dollar’s weakness and -$49.70 was due to predominant sellers, according to Kitco Gold Index.

The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs116,200 with an increase of 600. Gold in the local market was available at Rs115,600 on Tuesday last. The local prices did not decrease due to overnight increase in gold prices internationally when the local market was closed. Moreover, depreciation of the Pakistani rupee against the US dollar during the day also increased the gold prices locally.

A recovery in the risk sentiment turned out to be a key factor that prompted some profit-taking around the safe-haven gold. The risk sentiment stabilised a bit amid hopes for a positive outcome from the meeting between Russian and Ukrainian foreign ministers in Turkey on Thursday. Russia said on Wednesday it is not trying to overthrow the regime of Volodymyr Zelensky in Ukraine, and negotiations with Ukrainian officials to resolve the conflict are making headway.

However, modest US dollar’s weakness and softer US Treasury bond yields lent some support to the dollar-denominated gold. Nevertheless, the metal snapped four successive days of the winning streak to the highest level since August 2020 and remained at the mercy of developments surrounding the Russia-Ukraine saga.

From a technical perspective, the Relative Strength Index (RSI) has retraced from the overbought territory and is still above the midline, suggesting that there remains room to rise for gold price. The first support awaits at the key $2,000 psychological mark. A convincing break below might prompt aggressive long-unwinding trade and drag spot prices towards the next relevant support near the $1.980 area.

On the flip side, the overnight peak, around the $2,070 zone now seems to act as an immediate resistance ahead of the August 2020 swing high, around the $2,075 region.