The price of 24 karat gold per tola experienced a modest uptick in the local market, witnessing a Rs.100 increase to reach Rs.229,500 on Wednesday, compared to its previous sale at Rs.229,400. The price of gold (XAU/USD) continues its sideways consolidation, staying below the $2,200 mark during the first half of the European session on Wednesday. Traders exhibit caution as they await further cues regarding the Federal Reserve’s (Fed) monetary policy direction before committing to new trading positions. The upcoming release of the US Personal Consumption and Expenditure (PCE) Price Index on Friday is expected to be pivotal, influencing both US Dollar (USD) demand and providing momentum for the non-yielding yellow metal.
FED POLICY PATH AND US ECONOMIC OUTLOOK
Traders are closely monitoring the Fed’s projected three interest rate cuts for the year, which act as a supportive factor for gold prices. However, Tuesday’s slightly better-than-expected US Durable Goods Orders has bolstered optimism regarding US economic growth. Additionally, persistent inflationary pressures in the US may prompt the Fed to maintain higher interest rates for an extended period, thereby supporting elevated US Treasury bond yields. Consequently, the US Dollar (USD) has edged closer to a multi-week high reached last Friday, posing a challenge for bullish traders in the gold market.
As uncertainty looms over the Fed’s policy trajectory and its implications for the US Dollar and gold prices, traders exercise caution while awaiting key economic data releases. The release of the US PCE Price Index on Friday is expected to provide clarity and direction for both the USD and gold markets.
Moreover in the meantime, the interplay between Fed policy expectations, economic data, and inflationary pressures will continue to shape market sentiment and guide trading decisions in the gold market.
XAUUSD posted an intraday high of $2182.73 and intraday low of $2173.52. Gold is currently trading at $2178.24 (2:04pm Wednesday, 27 March 2024 (GMT+5) Time in Pakistan).
TECHNICAL ANALYSIS XAU/USD
Technical Analysis: The price of gold looks to be settling into a two-week range, suggesting that bullish momentum may be building. After a robust advance earlier in the month, the market behaviour of late points to a stabilisation phase. The oscillators on the daily chart are still in the positive range, suggesting that there may be a breakout to the upside. A rebound in purchasing interest over $2,200 would support the favourable setting and might trigger a retest of the record high hit last week, which is located around $2,223.
Any corrective pullback is expected to find support on the downside in the $2,164–2,163 range, then in the $2,156-2,155 and $2,147–2,146 zones. Technical selling pressure could be initiated by a big breach below the latter, which could push the price lower towards support levels around $2,128–2,127 and eventually $2,100.A decisive break below $2,100 would suggest a shift in sentiment, indicating possible further declines in the near term.
PAKISTAN BULLION MARKET
Similarly, the price of 10 grams of 24 karat gold saw a rise of Rs.86, settling at Rs.196,760 from Rs.196,674. Meanwhile, the price of 10 grams of 22 karat gold also climbed to Rs.180,363 from Rs.180,284, as reported by the All Sindh Sarafa Jewellers Association.
In contrast, the prices of silver remained steady, with the per tola and ten-gram rates maintaining at Rs.2,580 and Rs.2,211.93, respectively. This stability in silver prices provides a contrasting picture amidst the slight fluctuations observed in the gold market.
INTERNATIONAL GOLD MARKET TRENDS
Simultaneously, the international gold market also witnessed an increase in prices, with the price of gold rising by $7 to $2,200 from $2,193. This global uptick in gold prices reflects broader market trends and sentiments, influencing local prices as well. The Association’s report underscores the interconnectedness of local and international gold markets, highlighting the impact of global factors on local pricing dynamics.
