On Wednesday, the gold market in Pakistan witnessed a decrease in prices, with 24-karat gold being sold at Rs240,600 per tola, marking a Rs400 drop per tola. The current price reflects a significant Rs3,000 reduction from its actual cost today, attributed to a decline in purchasing power.
The Karachi Sarafa Association reported that the price of 24-karat gold per 10 grams fell by Rs343, settling at Rs206,276. Similarly, 22-karat gold prices also declined, with the precious metal being sold at Rs189,086 per 10 grams.
In contrast, silver prices in the domestic market remained stable. 24-karat silver maintained its price at Rs2,820 per tola and Rs2,418 per 10 grams.
Globally, the gold market showed a slight uptick. Spot gold traded near $2,331 an ounce, an increase of $2.5 or 0.11% from the previous session.
GOLD PRICE DECLINE AMID MODEST USD STRENGTH AND TECHNICAL INDICATORS
The gold price (XAU/USD) experienced a downward trend on Tuesday, dropping to the $2,316-$2,315 range, moving closer to a multi-week low seen the previous day. This decline comes as the US Dollar (USD) showed modest strength.
XAU/USD TECHNICAL OVERVIEW
As of the latest analysis, the gold price appears to have settled below the 50-day Simple Moving Average (SMA). Daily chart oscillators have begun to gain negative momentum, suggesting the potential for further losses. A drop below the multi-week low of approximately $2,315-$2,314 will reinforce the bearish outlook and could push XAU/USD below the $2,300 mark, potentially testing the $2,280 support level. Continued selling pressure might trigger further declines, extending the corrective downtrend observed over the past couple of weeks.
Conversely, any significant upward movement is expected to face strong resistance around the $2,349-$2,350 supply zone. The next significant barrier is near the $2,360-$2,364 region. A decisive break above this area could propel gold towards the $2,385 intermediate resistance and possibly the $2,400 mark. Sustained bullish momentum might drive the price towards the $2,425 zone and eventually to the $2,450 region, near the all-time high reached in May.
FUNDAMENTAL OVERVIEW
The recent selling pressure on gold was partly due to a modest recovery in the USD from a two-month low. Despite this, the USD’s rally lacked strong follow-through, influenced by expectations that the Federal Reserve (Fed) might cut interest rates later this year, following weaker US macroeconomic data. These expectations have kept US Treasury bond yields low, benefiting the non-yielding gold during the European session on Wednesday.
In addition to these factors, geopolitical tensions from ongoing conflicts in the Middle East have supported the safe-haven appeal of gold, bringing its price closer to the 50-day SMA. Despite these supportive elements, XAU/USD remains within a one-week trading range as investors are cautious, awaiting key US employment data, specifically the Nonfarm Payrolls (NFP) report due on Friday. Prior to this, the US ADP report on private-sector employment and the US ISM Services PMI are expected to provide further market direction.
MARKET SUMMARY
- Gold Price: XAU/USD fell to $2,316-$2,315 on Tuesday.
- Technical Outlook: Below the 50-day SMA with negative oscillators indicating further potential declines.
- Resistance Levels: $2,349-$2,350, $2,360-$2,364, $2,385, $2,400, $2,425, and $2,450.
- Support Levels: $2,315-$2,314 and $2,280.
- Fundamental Factors: Modest USD strength, low US Treasury yields, geopolitical tensions, and cautious investor sentiment ahead of key US employment reports.
