Gold price turned positive for the first time during this week on Thursday amid sluggish price action in the US treasury yields and the greenback. Gold in the international market was available at $1,791.60 per ounce after gaining $1.50 at 1315 hours GMT. Meanwhile, the price of 10 grams of yellow metal in Pakistan increased to Rs100,900 after gaining Rs200. Gold in the local market was available at Rs103,700 per 10 grams on Wednesday last.
The US 10-year Treasury dropped 2.2 basis points (bps) to 1.64 percent after refreshing monthly high the previous day even as the Federal Open Market Committee (FOMC) minutes said, “Some participants said faster tapering could be warranted.”
From a technical view, the gold price is defending critical support around $1,790. If the sellers find a strong foothold below the latter, then the recent downtrend could resume towards $1,785. Further south, the level of $1,779 will guard the downside.
On the flip side, gold bulls need acceptance above the powerful $1,797 resistance. The next relevant upside target is seen at $1,800 psychological level. The additional advances will then challenge the bearish commitments near $1,807.
According to experts, the sluggish price action in the yields and dollar is aiding the rebound in gold price. They said that concerns over the rising number of Covid-19 cases in Europe and the re-imposition of lockdown measures turned out to be a key factor that extended some support to the safe-haven gold.
Coronavirus infections broke records in parts of Europe on Wednesday, with the continent once again the epicentre of a pandemic that has prompted new curbs on movement and seen health experts push to widen the use of booster vaccination shots.
Kamran Nazir Malik is a law graduate and master in Economics. He is associated with TLTP News Wire Service as correspondent since 2018.