After a three-day slide to its lowest level since September 20, gold prices rebounded on Wednesday. The Karachi Sarafa Association reported that 24-karat gold rose by Rs1,400 to Rs271,900 per tola, and the price per 10-gram for 24-karat gold rose by Rs1,200 to Rs233,111. Globally, spot gold edged up by $11.1, or 0.43%, reaching $2,610 an ounce, temporarily reversing a downward trend.
Domestic Gold and Silver Market Overview
In the domestic market, the 24-karat gold rate rose significantly, reflecting trends in global pricing and demand dynamics. Additionally, 22-karat gold was quoted at Rs213,685 per 10-gram. Meanwhile, silver prices remained unchanged, with 24-karat silver steady at Rs3,250 per tola and Rs2,786 per 10-gram.
Global Factors and Market Reactions
The renewed support for gold can be attributed to ongoing uncertainty in global equity markets, which has driven investors to seek safe-haven assets. However, optimism surrounding US President-elect Donald Trump’s expected economic policies has bolstered the US Dollar (USD) to a near six-month high, applying downward pressure on gold. Elevated US Treasury yields, fueled by anticipated inflation and controlled Federal Reserve (Fed) rate cuts, are also discouraging aggressive gold investment.
Investors are eyeing upcoming US inflation data, which could further influence the Fed’s stance on monetary policy. Current projections show an expected 0.2% rise in the Consumer Price Index (CPI) for October and an annual increase to 2.6% from 2.4%. Higher-than-expected CPI results could signal a Fed pause on rate cuts, potentially benefiting the USD and further impacting gold prices.
Technical Analysis: Key Resistance and Support Levels
From a technical viewpoint, gold’s recent rebound above the 38.2% Fibonacci retracement level warrants caution among bearish traders. Oscillators show that the daily chart holds in negative territory without reaching the oversold zone, implying a continued downward bias.
Key resistance levels to watch include $2,630-$2,632, followed by a potential upper resistance at $2,670, and ultimately the $2,700 mark. A strong move beyond $2,700 could signal the end of the recent corrective decline. For bearish traders, a decisive break below the $2,600 mark and the 38.2% Fibonacci level could extend the downward trend, with critical support at the $2,540 zone—encompassing the 100-day Simple Moving Average (SMA) and the 50% Fibonacci level.
Outlook
The outlook for gold remains uncertain as market sentiment sways between bullish USD momentum and equity market volatility. In the coming days, the direction of gold prices will likely hinge on upcoming US CPI data and Fed commentary, as both are crucial indicators for inflation and monetary policy adjustments. If inflation continues to rise, USD strength could persist, limiting gold’s upward potential. Conversely, any signs of easing inflation or weaker USD performance may provide fresh support for gold.
