Daily Times

Gold price surged on Wednesday following a dip in the US dollar and treasury bond yield as hopes rose for a negotiated end to the Ukraine conflict.

As of 1355 hours GMT, gold in the international market was available at $1,931.20 per ounce, gaining $11.20. Out of a $11.20 per ounce increase, +$12.20 was due to the dollar’s weakness and -$1 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 Rs113,400 after gaining Rs1,300.

Gold price in the local market settled at Rs112,100 on Tuesday last. An increase in the local gold price was due to overnight increase in the prices globally when the local market was closed. Moreover, the rupee’s depreciation against the US dollar also impacted the local prices negatively.

Gold built on the overnight solid rebound from the 50-day SMA support, around $1,890 region, or over a two-month low and gained some positive traction.

The US dollar languished near a more than one-week low amid some follow-through buying around the shared currency, bolstered by hopes for a breakthrough in the Russia-Ukraine peace negotiations. Apart from this, the ongoing retracement slide in the US Treasury bond yields undermined the greenback and extended some support to the dollar-denominated commodity.

However, any meaningful recovery still seems elusive amid the latest optimism about a diplomatic solution to end the war in Ukraine. In fact, the Russian Defence Ministry promised to scale down military activity in Kyiv and Chernihiv to create conditions for dialogue. Adding to this, top Russian negotiator Vladimir Medinsky was quoted saying that there have been enough developments to hold a meeting between President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskyy.

From a technical perspective, the gold price is looking to find acceptance above $1,940, which seems to be the first resistance level. Gold bulls will then target the next resistance at 1,956 which, if cleared decisively, will reaffirm a near-term positive bias for gold prices.

On the flip side, the $1,930 seems to protect the immediate downside ahead of the support level at $1,914. Any meaningful slide below the second support level might continue to find decent support near the $1,895-$1,890 region, which should act as a strong base for gold.