The domestic GOLD market witnessed a significant upswing on Monday, with 24-karat gold prices soaring by Rs900 per tola, reaching an impressive Rs221,200. This continuation of gold’s winning streak is notably reported by the Karachi Sarafa Association, a key player in the precious metals market. The price of a 10-gram 24-karat gold also saw a substantial rise, hitting Rs189,643 per tola, an increase of Rs771.

GOLD’S PERFORMANCE

A Closer Look at the Numbers

The surge didn’t stop with just 24-karat gold; the price for 10-gram 22-karat gold also ascended to Rs173,840 per tola. This upward trend is not isolated but part of a broader pattern observed in the past week, which saw a whopping increase of Rs5,200 per tola in the price of 24-karat gold.

Steady Silver

In contrast to gold’s dramatic rise, silver prices held steady on Monday. The cost for 24-karat silver per tola remained at Rs2,600, and Rs2,229 per 10-gram, indicating a stable market for this metal amidst the gold rally.

UNDERSTANDING THE UPTREND

International Influences

The domestic bullion market’s momentum is closely tied to international trends. Notably, international spot gold reached a 2-month high last Friday, propelled by U.S. economic data that hinted at a potential rate cut by June. This data, which pointed to a slump in manufacturing activity but met market expectations for prices, contributed to a weakening dollar. As a result, gold, often seen as a safe-haven asset, benefited significantly.

Current International Spot Gold Rates

XAUUSD posted an intraday high of $2088.36 and intraday low of $2079.55. Gold is currently trading at $2085.70 (2:50pm Monday, 04 March 2024 (GMT+5) Time in Pakistan). A day earlier gold was trading at $2051.75 (6:21pm Friday, 29 February 2024 (GMT+5) Time in Pakistan). The weekly session on Friday, 29 February, 2024 closed at $2082.84 gaining (1.87%) for the day and and (2.31%) for the week. 

GOLD XAUUSD TECHNICAL ANALYSIS

The recent activities in the gold market have given the bulls a significant edge, especially after the price broke through the crucial resistance zone of $2,060-2,062. This breakout is viewed by technical analysts as a clear signal for bullish traders, suggesting the possibility of further gains in the near future. However, with the Relative Strength Index (RSI) flirting with the overbought territory, there’s a cautious atmosphere among traders about initiating new positions.

THE BULLISH BREAKOUT

Resistance Turned Support

The leap beyond the $2,062-2,064 barrier on Friday is a critical development, reinforcing the bullish sentiment in the gold market. This resistance level, now transformed into support, is expected to safeguard the immediate downside, providing a safety net against short-term market fluctuations.

A Word of Caution

Despite the bullish momentum, the proximity of the RSI to the overbought zone is causing some hesitation among traders. This scenario suggests that a period of consolidation might be on the horizon, offering a breather before the market gears up for an extension of the almost three-week-long uptrend.

KEY LEVELS TO WATCH

Downside Risks

Should there be sustained weakness below the $2,062-2,064 support zone, the market might see aggressive technical selling, potentially exposing the gold price to the 50-day Simple Moving Average (SMA) support near $2,034. This level is crucial; a decisive break below could tilt the market in favor of bearish traders, challenging the current positive outlook.

Upside Potential

Conversely, the immediate challenge for gold prices lies at the $2,088 mark, a more than two-month high reached on Friday. Overcoming this hurdle could pave the way to the $2,100 psychological mark, with potential momentum carrying the price towards intermediate resistance levels around $2,125-2,030, and possibly even to the all-time highs of $2,144-2,145 recorded in early December.

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