Daily Times

Gold price fell over one percent on Monday, a day ahead of the US Federal Open Market Committee (FOMC) meeting which is likely to increase interest rates.

As of 1220 hours GMT, gold in the international market was available at $1,966 per ounce, shedding $25.10. Out of a $25.10 per ounce decrease, +$3.55 was due to the dollar’s weakness and -$28.65 was due to predominant sellers, according to Kitco Gold Index.

The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, fell to Rs113,300 with a decrease of Rs900. Gold in the local market was available at Rs114,200 on Saturday last. Pakistani rupee depreciated 0.26 percent against the US dollar during the day, which trimmed the overall decrease in local gold prices.

The US Federal Reserve earlier hinted at the possibility of a 25 basis points rate hike in the coming week. The recent monster rally in commodity prices following Russia’s invasion of Ukraine has raised worries about a major inflationary shock and is fuelling hawkish Fed expectations.

Gold marked the third day of a negative move in the previous four sessions amid hopes for a diplomatic solution of the Russia-Ukraine conflict and elevated US Treasury bond yields. The benchmark 10-year US Treasury bond yield rose more than 10 percent last week, which also impacted the gold prices. The risk-on impulse undermined the safe-haven commodity amid elevated US Treasury bond yields.

From a technical perspective, the gold price has immediate support at $1,960 level. The next relevant support is pegged near the $1,945 area. Some follow-through selling might shift the bias in favour of bearish traders and drag spot prices towards the $1,930 levels.

On the flip side, any meaningful recovery now seems to confront immediate resistance near the $1,986 area ahead of the key $2,000 psychological mark.