Gold failed to regain its traction on Thursday despite the 10-year US Treasury-bond yield going down during the session.
Gold in the international market was available at $1,802.40 per ounce, shedding $2.40 as of 1315 hours GMT. The price of 10 grams of yellow metal in Pakistan, meanwhile, went up to Rs103,500 after gaining Rs600. Gold in the local market was available at Rs102,900 on Wednesday last.
An increase in the price of the yellow metal in the local market was due to overnight surge in gold’s price when the local market was closed. Moreover, the Pakistani rupee gained 74 paisa (+0.41 percent) against the dollar during the day, which also limited the overall increase in the local gold price.
According to experts, the 10-year rates have recaptured the 1.50 percent key level despite going down by around 2 percent on Thursday, which warrants caution for gold bulls. Moreover, the year-end repositioning in the US dollar will continue to have a significant impact on gold. They said the year-end flows are set to keep gold choppy around $1,800.
The US Treasury yields edged higher on Wednesday as investors continued to monitor developments on the Omicron Covid-19 variant. The yield on the benchmark 10-year Treasury note ticked up 1.5 basis points to 1.496 percent, while the yield on the 30-year Treasury bond fell 1.7 basis points to 1.919 percent.
From a technical perspective, the gold price is extending the recent losses, with bears looking to retest the ascending 100-SMA support at $1,792. The next downside target is seen at the horizontal trendline support at $1,785.
On the flip side, bulls need to recapture the 200-SMAs confluence area at $1,805, above which the 21-SMA at $1,807 will come into play. Recapturing the latter is critical to resuming the uptrend towards the monthly highs of $1,820. Ahead of that level, the previous stubborn resistance at $1,814 will challenge the bulls’ commitments once again.
