Gold (XAU/USD) continues its remarkable journey, notching up gains for the seventh consecutive trading session on Thursday. The lustrous metal hit fresh all-time highs around $2,160, propelled by a constellation of favorable factors. Foremost among these is the mounting anticipation of a rate-cut decision by the Federal Reserve (Fed) in its upcoming June monetary policy meeting, significantly boosting gold’s allure.
Pakistan’s local gold market saw a considerable uptick in prices on Thursday, with the cost of per tola 24 karat gold jumping by Rs2,750, reaching a striking Rs228,150. This marked a notable increase from its previous position at Rs225,400, as noted in the last trading session.
XAUUSD posted an intraday high of $2164.77 and intraday low of $2144.30. Gold is currently trading at $2160.68 (6:25pm Thursday, 07 March 2024 (GMT+5) Time in Pakistan). A day earlier gold was trading at $2123.77 (1:05pm Wednesday, 06 March 2024 (GMT+5) Time in Pakistan).
A REFUGE AMIDST UNCERTAINTY
In these times of global financial unpredictability, gold’s status as a safe-haven asset shines brighter than ever. Its demand has surged, further bolstered by a notable decrease in US Treasury yields. This reduction has diminished the opportunity cost associated with parking assets in non-yielding investments like gold. Despite a slight uptick in 10-year US Treasury yields to 4.11% during Thursday’s European session, the significant drop from 4.22% in the preceding sessions underscores a broader trend favoring gold.
Fed Chair Jerome Powell’s recent testimony to Congress added to the momentum. His indication that rate cuts might be on the horizon for this year—despite cautioning that a return to 2% inflation is not guaranteed—has investors leaning towards gold.
THE US DOLLAR’S INFLUENCE
The US Dollar Index (DXY) felt the ripple effects, dipping to a monthly nadir around 103.20 amidst the clouded economic forecast for the United States. Moving forward, the spotlight shifts to the US Nonfarm Payrolls (NFP) data for February, expected on Friday, alongside Powell’s continued congressional testimony.
TECHNICAL ANALYSIS
Technically, gold is basking in the glow of its record peak of $2,161.60, having eclipsed the previous resistance mark from early December. Currently trading in unprecedented territory, the outlook for gold remains predominantly bullish. However, caution is warranted; the ascent to overbought conditions on momentum oscillators suggests a potential for a corrective pullback. Notably, the 14-period Relative Strength Index (RSI) has hit an apex not seen in two years at 82.00, signaling a pause might be prudent.
Looking ahead, support levels from the highs of early December and late December stand as critical safeguards against potential downturns.
In conclusion, gold’s meteoric rise amidst a backdrop of Fed policy adjustments and global economic uncertainties offers a compelling narrative. As investors and analysts alike watch for the next moves in US economic indicators and Fed rhetoric, gold remains a focal point of market speculation and strategic investment.
INSIGHT INTO THE 24 KARAT AND 22 KARAT GOLD RATES
Furthermore, the price for 10 grams of 24 karat gold witnessed a rise of Rs2,358, setting the new price at Rs195,602, up from Rs193,244. The surge didn’t stop there; the 22 karat gold also saw an uplift, with the rate for 10 grams escalating to Rs179,301 from the prior Rs177,140. These updates were diligently reported by the All Sindh Sarafa Jewellers Association, keeping investors and the general public informed.
SILVER STANDS STILL
Contrastingly, the silver market presented a stark difference in behavior. The prices for per tola and ten-gram silver remained steadfast, holding their ground at Rs2,600 and Rs2,229.08, respectively. This stability in silver rates provides a unique juxtaposition against the volatile gold market.
INTERNATIONAL GOLD MARKET MOVEMENTS
On the international stage, gold prices mirrored the local trend, experiencing an increase of $26. This pushed the selling price to $2,174 as compared to the preceding day’s valuation at $2,148. Such movements in the global market often influence local prices, reflecting the interconnected nature of global and local financial landscapes.
