GOLD PRICE PAKISTAN: On Wednesday, domestic bullion experienced a significant reversal, nullifying gains from the previous session. The price of 24-karat gold in Pakistan saw a notable decline of Rs300 per tola, settling at Rs216,100. The price of 10-gram 24-karat gold registered a decrease of Rs257, standing at Rs185,271, while the price of 10-gram 22-karat gold dropped by Rs235 to Rs169,832. Additionally, the price of silver also witnessed a decline, with 24-karat silver being sold at Rs2,650 per tola and Rs2,271.94 per 10-gram.

GOLD XAUUSD

Gold price (XAU/USD) showed resilience during the early European session on Wednesday, drawing support near the $2,024-2,023 range and maintaining a positive trend for the second consecutive day. Amid concerns about geopolitical risks and a sluggish economic recovery in China, investors exhibit caution, diminishing expectations for an early Federal Reserve (Fed) interest rate cut. This caution is evident in the weakened tone of equity markets, providing some backing to the safe-haven precious metal.

Despite these factors, the likelihood of a more aggressive Fed policy easing in 2024 is diminishing, given the ongoing resilience of the US economy. This resilience may restrain bullish sentiment surrounding gold, a non-yielding asset. Additionally, the US Dollar (USD) hovers just below a multi-week high reached last Friday, supported by elevated US Treasury bond yields. This circumstance could potentially limit the upside for the US Dollar-denominated commodity, with traders closely monitoring US consumer inflation figures for insights into the Fed’s future rate-cut trajectory.

TECHNICAL STANDPOINT

A breakthrough has occurred at the significant level of 2016.90, confirming a potential rally toward the next correctional level at 1977.46. It’s crucial to note that surpassing levels of 2046.60 and then 2065.70 could signal a reversal of the anticipated downward trend, possibly indicating a shift in the market’s previous upward trajectory.

With no significant macroeconomic data from the US on Wednesday, the XAU/USD pair remains influenced by USD price dynamics. From a technical standpoint, the gold price remains below the $2,040-2,042 resistance level, sustaining a bearish potential. The multi-week low at around $2,017, aligned with the 50-day Simple Moving Average (SMA), acts as a crucial support level. A convincing break below this level may expose the $2,000 psychological mark, with further downside targets at the December swing low of $1,973 and the confluence of the 100- and 200-day SMAs at $1,965-1,963.

In recent market movements, gold struggles to capitalize on intraday gains, hampered by uncertainty regarding the Federal Reserve’s timing for interest rate cuts. The New York Fed’s report on Monday revealed a dip in US consumers’ inflation expectations, fostering speculation of an impending shift in the Fed’s policy stance. Despite above-target inflation in the resilient US economy, the central bank has room to maintain higher interest rates, influencing the yield in the benchmark 10-year US government bond, thereby supporting the US Dollar and restraining gold.

Bearish traders appear hesitant, opting to wait on the sidelines ahead of the forthcoming US consumer inflation figures scheduled for release on Thursday. In a separate development, a senior official from the People’s Bank of China announced potential monetary policy tools to support reasonable credit growth, indicating efforts to bolster the country’s economic conditions.

In the realm of XAUUSD, major banks are forecasting gold prices to range between $1,950 and $2,200 per ounce in 2024, as reported by Bloomberg from reliable financial sources.

XAUUSD exhibited an intraday high of $2040.30 and a low of $2023.91. As of 6:37 pm on Wednesday, 10th January 2024 (GMT+5), gold is currently trading at $2031.88 in Pakistan.

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