Daily Times

Gold extended its consolidative price move for the fifth successive session on Monday and hit its highest level in two weeks amid a weaker US dollar; however, the benchmark 10-year US Treasury bond yield surged more than 1 percent, limiting gold’s upside.

As of 1340 hours GMT, gold in the international market was available at $1,856.40 per ounce, gaining $9.70 (+0.53 percent). Out of the $9.70 per ounce increase, +$12.05 was due to weakening of the US dollar and -$2.35 was due to predominant seller, according to Kitco Gold Index.The price of 10 grams of 24-carat yellow metal in Pakistan, increased to Rs121,400 after gaining Rs1,900. Gold price in the local market remained Rs119,500 on Friday last. An increase in the local gold prices was due to Pakistani rupee’s continuous depreciation against the US dollar during these days. The local unit has depreciated by 7.22 percent during the last two weeks. Amid the continuous depreciation of the rupee, experts expect that gold surge will continue as the local currency sinks. Gold has emerged as a safe asset during the ongoing economic crisis and the people have been aggressively buying gold to protect their cash from deflation. The drop in the rupee value forced the gold trading body to revise up the bullion price significantly as Pakistan meets the local demand for the precious yellow metal through imports.

Given that at least 50 bps Federal Reserve rate hike move over the next two meetings is already priced, investors continued to unwind bets for any further US dollar gains. In fact, the key USD Index dropped to a near one-month low, which, in turn, was seen as a key factor that benefitted the dollar-denominated gold. That said, a combination of factors might keep a lid on any further gains for the precious metal, warranting caution for aggressive bullish traders. Hopes that loosening Covid-19 lockdowns in China could boost the global economy remained supportive of the risk-on impulse.