International gold prices went down on Monday amid rebounding US treasury bond yields, stronger US dollar and easing Omicron fears.
Gold in the international market was available at $1,777.90 per ounce after shedding $5.70 at 1240 hours GMT. Gold witnessed a subdued price action also because of hawkish Federal Reserves’ expectations for a faster policy tightening, which turned out to be a key factor that acted as a headwind for the non-yielding yellow metal.
The price of 10 grams of yellow metal in Pakistan, meanwhile, decreased to Rs100,800 after shedding Rs600. Gold in the local market was available at Rs101,400 per 10 grams on Saturday last. The decrease in gold value in the local market was due to slight appreciation of the Pakistani rupee against the US dollar.
According to experts, gold struggled to capitalise on Friday’s goodish rebound from a one-month low touched in the previous day and witnessed a subdued/range-bound price action on the first day of a new trading week. The gold price remained confined in a narrow band and witnessed a range-bound trading. Apart from this, the risk-on impulse in the markets led to a goodish rebound in the US Treasury bond yields. This, in turn, assisted the US dollar to regain positive traction and further undermined the dollar-denominated gold.
From a technical perspective, the emergence of fresh selling on every attempted recovery beyond the $1,800 mark and acceptance below the 100-day and 200-day SMAs confluence validates the negative bias. Hence, a slide back towards challenging horizontal support, around the $1,760 region, remains a distinct possibility. Some follow-through selling should pave the way for a slide towards the next relevant support around the $1,752-51 area.
On the flip side, immediate resistance is pegged near the $1,791-92 region, or the 100/200-DMAs confluence, which if cleared might trigger a short-covering move. Gold might then move back above the $1,800 level and test the $1,810-15 supply zone. The latter should act as a strong barrier for gold and a key pivotal point for short-term traders. A sustained strength beyond has the potential to lift spot prices back towards the $1,832-34 area.