The second day of week in Gold Prices in Pakistan, domestic bullion markets in Pakistan witnessed a fall with the price of 24-karat gold dropping by Rs600 per tola to reach Rs217,300. As per reports a notable gain in the price of 10-gram 24-karat gold, closing at Rs186,300, reflecting an increase of Rs514. Meanwhile, the price of 10-gram 22-karat gold reached Rs170,775 from Rs171,246 a day earlier.

In contrast, silver maintained its stability in the domestic market, with 24-karat silver being traded at Rs2,650 per tola and Rs2,271.94 per 10-gram.

Inability to reclaim the weekly peak above $2,060 prompts a sell-off in gold prices (XAU/USD). Market participants reevaluating when the Federal Reserve (Fed) might cut interest rates is the reason for the decline.

In addition to hawkish remarks made by European Central Bank (ECB) officials, the robust Consumer Price Index (CPI) report for December also changed market expectations.

Though market expectations point to a potential rate cut in March, officials are being cautious in their endorsement of a dovish interest rate policy. Interest rates remain between 5.25 and 5.50% due to consistent labour demand, consumer price inflation in the US economy that is almost twice as high as the mandated 2%, and a low probability of a recession.

This scenario allows Fed policymakers to uphold a restrained monetary policy stance for the current period.

TECHNICALLY

Following its inability to reclaim the weekly high of $2,062, the price of gold has experienced a severe sell-off. The price of precious metal has dropped to almost $2,040, and traders anticipate that it will stay apprehensive until the Fed provides more clues regarding when rate cuts will occur. The yellow metal has corrected to close to the 20-day Exponential Moving Average (EMA), which is trading at $2,039, after giving up all of the gains it made on Monday.

If the gold price is unable to hold above the $2,030 low set on January 3, it may see further downside and be vulnerable to the psychological support level of $2,000.

XAUUSD

XAUUSD posted an intraday high of $2055.61 and intraday low of $2038.79. Gold is currently trading at $2040.42 (4:22pm Tuesday, 16 January 2024 (GMT+5) Time in Pakistan).

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