Gold Prices Witness a Boost, Reaching Rs217,100/tola

In a positive start to the new week, gold prices experienced a surge of Rs300 per tola on Monday, aligning with the upward trend in international bullion prices. Data compiled by various jeweler associations revealed that the rate for one tola of 24-karat gold climbed to Rs217,100 from Rs216,800. Similarly, the cost for 10 grams of 24-karat gold rose to Rs186,128 from Rs185,871, indicating a gain of Rs257.

The gold market in the country saw a weekly increase of Rs1,200 (+0.56 percent) last week, bouncing back from a decline of Rs8,000 (-3.58 percent) per tola in the preceding week. As of 1320 hours GMT, international gold futures were trading at $2,023 per ounce, marking an uptick of $3.10. Of this increase, +$1.75 was attributed to the weakening US dollar, and +$1.35 was due to predominant buyers, as per the Kitco Gold Index.

Gold maintained a consolidation phase around $2,020 after finishing the previous week slightly higher. The 10-year US Treasury bond yield, remaining below 4 percent, posed a challenge for gold prices to establish a clear direction. Last week, the Federal Reserve signaled the conclusion of its monetary policy tightening cycle, projecting a cumulative 75 basis points (bps) rate cuts in 2024. This announcement restrained the US dollar's rebound from a four-month low, providing support to the precious metal. Additionally, ongoing geopolitical risks and concerns about a potential economic downturn, especially in China and the Eurozone, further bolstered the status of gold as a safe-haven asset.

Analyzing from a technical standpoint, any further upward movement is expected to encounter strong resistance around $2,040. Breaking this level could lead the price to retest last week's swing high, situated around the $2,049-2,050 region. On the downside, the $2,015-2,010 horizontal resistance break-point is likely to act as a barrier, guarding against immediate declines before reaching the psychological mark of $2,000. A convincing break below this level may render the gold price susceptible to challenging the 50-day SMA support, currently situated near the $1,982-1,981 region.