Gold price consolidated gains on Thursday amid a dip in the US treasury bond yield and hopes for a negotiated end to the Russia-Ukraine conflict.
As of 1320 hours GMT, gold in the international market was available at $1,937.90 per ounce, gaining $5. Out of a $5 per ounce increase, -$9.75 was due to the strengthening dollar and +$14.75 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 Rs113,500 after gaining Rs100. Gold price in the local market settled at Rs113,400 on Wednesday last. A relatively lower increase in the local gold price was due to overnight decrease in the prices globally when the local market was closed. The rupee’s depreciation against the US dollar also impacted the local prices negatively. Gold extended its rebound as the benchmark 10-year US bond yields continued to lose momentum and lowered for the third consecutive session to 2.30 percent from last week’s peaks around 2.55 percent, benefiting the yellow metal. However, the gold prices remained in check amid an extended rebound in the US dollar. A lack of progress on the Russia-Ukraine peace talks combined with concerns about China’s slowdown and soaring inflation are keeping markets edgy, underpinning the dollar’s safe-haven appeal.
The safe-haven metal has, however, been set for its biggest quarterly gain since September 2020, as the Russia-Ukraine conflict lifted bullion’s appeal. The metal has gained about 5 percent so far in the quarter and 0.7 percent in March. Bullion is considered a safe store of value during times of political and financial uncertainty and is viewed as a hedge against rising inflation. However, rising interest rates increase the opportunity cost of holding non-yielding gold.
From a technical perspective, the gold price is looking to find acceptance above $1,944, 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 $1,925 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 psychological $1,9o0 level.