Gold price inched down in the international market on Monday, as the underlying narrative of sooner than expected US Federal Reserves’ monetary policy normalisation to counter inflationary risks continues to play out. Gold in the international market was available at $1,764 per ounce after shedding $4.40 at 1230 hours GMT.
Meanwhile, the price of 10 grams of yellow metal in Pakistan increased to Rs97,700 on Monday after gaining Rs500. Gold in the local market was available at Rs97,200 per 10 grams on Saturday. The increase in price of gold in the local market was due to depreciation of the rupee against the US dollar, which fell by 0.93 percent on Monday.
According to experts, an upside surprise to the US Retail Sales data bolstered the hawkish Fed’s bets, leading to an extended rally in the US Treasury yields across the curve. Meanwhile, the buying resurgence in the US dollar, in the face of firm yields and China slowdown worries-led risk-aversion, also exerts additional downside pressure on gold price.
From a technical point of view, gold has breached the critical support at $1765, and next support is at $1760. However if the bearish momentum accelerates, then the support level of $1756 will get challenged. The additional downside will then open up towards $1750, the previous week’s low.
On a flip side, recapturing the support-turned-resistance at $1765 is critical for gold buyers to initiate a meaningful recovery towards $1768. Up next, the bulls will aim for $1773. Further up, the level to beat for gold bulls is seen around $1777.
