Daily Times

Gold price regained traction on Wednesday and surged half a percent due to a lack of progress in the Russia-Ukraine peace talks.

As of 1320 hours GMT, gold in the international market was available at $1,931 per ounce, gaining $9.30. Out of a $9.30 per ounce increase, -$6.40 was due to the dollar’s strengthening and +$15.70 was due to predominant buyers, according to Kitco Gold Index.

The price of 10 grams of 24-carat yellow metal in Pakistan, meanwhile, increased to Rs112,700 after gaining Rs300. Gold in the local market was available at Rs112,400 on Tuesday last. Though the local market remained closed on Wednesday due to a public holiday, the change in the gold price will be settled when the market opens on Thursday.

The market sentiment remains fragile amid the lack of progress in the Russia-Ukraine peace negotiations. In fact, Italy’s Prime Minister Mario Draghi noted that Russia is not showing interest in a truce for successful peace talks. Separately, Russian Foreign Minister Sergei Lavrov said that talks with Ukraine are difficult as Kyiv is constantly changing its position. This, in turn, tempered investors’ appetite for perceived riskier assets, which was evident from modest pull-back in the equity markets, and benefitted the safe-haven precious metal.

The Federal Reserve last week indicated it could raise interest rates at all the six remaining meetings in 2022. The prospects for a faster policy tightening by the Fed pushed the yield on the benchmark 10-year US government bond to its highest level since 2019.

From a technical perspective, immediate resistance is pegged near the $1,936-$1,938 area ahead of the $1,945-$1,950 region. The latter coincides with the top boundary of the aforementioned trading range, which if cleared decisively should pave the way for additional gains. The momentum could then push gold towards the $1,975-$1,976 intermediate hurdle, above which bulls might aim back to reclaim the key $2,000 psychological mark.

On the flip side, the $1,912-$1,910 area seems to protect the immediate downside ahead of the monthly low, around the $1,895 region. Sustained weakness below will reaffirm the negative bias and drag gold prices towards the next relevant support near the $1,870-$1,868 zone.