The price of gold increased by Rs1,000 per tola on Wednesday due to a surge in international bullion prices. According to the Karachi Sarafa Association, the price for one tola of 24-karat gold rose to Rs220,600 from Rs219,600. Similarly, the price for 10 grams of 24-karat gold increased to Rs189,129 from Rs188,272, while the price for 10 grams of 22-karat gold increased to Rs173,368 from the previous price.
In the international market, gold futures were available at $2,068 per ounce, showing a slight increase. The increase was attributed to a weakening US dollar and predominant sellers.
The US dollar finding stability and cautious market mood has allowed investors to catch up on their trades and macroeconomic developments. This has led to muted activity on the US Federal Reserve (Fed) interest rate cut bets for next year, leaving gold buyers uncertain.
From a technical perspective, the 14-day Relative Strength Index (RSI) indicator supports the bullish potential, but a pullback in gold price could extend towards the 21-day Simple Moving Average (SMA) at $2,032. A sustained break above the rising trendline resistance at $2,079 is needed to resume the recovery momentum towards the $2,100 psychological level.
Insight: The increase in gold prices in both the local and international markets reflects the ongoing economic uncertainty, as investors seek out safe-haven assets like gold. The potential for a pullback in gold prices amidst the cautious market mood highlights the delicate balance between economic stability and inflation concerns. Additionally, the technical analysis provides valuable insights into potential price movements and key levels to watch for in the gold market.
