Daily Times

Gold prices extended its three days’ retracement slide on Thursday amid a weakening US dollar and surging treasury bond yields.

As of 1415 hours GMT, gold in the international market was available at $1,942 per ounce, shedding $15.70 (-0.80 percent). Out of the $15.70 per ounce decrease, +$1.95 was due to weakening of the US dollar and -$17.65 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 after gaining Rs500. Gold price in the local market settled at Rs115,700 on Wednesday last. The reverse change in local gold prices was due to falling rupee against the US dollar. During the last four days, the rupee has shed Rs5.42 against the US dollar and slipped to 186.97 from 181.55.

According to experts, the spot gold prices are in retreat once again and eyeing a break below the $1940 level and a test of their 50-Day Moving Average in the $1930s. The US 10-year treasury bond yield was last up 4bps on the day and eyeing a push back above 2.90 percent and towards multi-year highs set earlier in the week close to 3 percent. Higher yields increase the opportunity cost of holding non-yielding assets such as gold. The gold price have been going down after hitting the six-week highs of $1,998 earlier this week.

From a technical perspective, previous week’ low at $1,940 will offer initial support. The next line of defence for gold bulls is seen at $1,935. Gold bears may target a drop back towards the low $1900s.

On the flip side, gold price faces first resistance at the SMA10 one-day at $1,954, above which $1,956 could come into play. The $1,960 level will be the level to beat for gold buyers.