In line with global trend, gold hits 3-week low

International market retreats as investors resort to profit-taking

Our Correspondent December 10, 2023
US inflation data, scheduled to be announced on Wednesday, will determine gold’s short-term trajectory. PHOTO: FILE


Gold price dropped to a three-week low at Rs215,600 per tola (11.66 grams) on Saturday in line with the global trend where profit-taking could push the metal further down early next week.

All Pakistan Saraf Gems and Jewellers Association revised down the commodity’s price by 1.37%, or Rs3,000. In the international market, it dropped 1.22%, or $26, to $2,024 per ounce (31.10 grams).

AA Gold Commodity Director Adnan Agar said “as projected earlier, gold is retreating these days after hitting a new all-time high at $2,130 per ounce on Monday.”

He pointed out that an outstanding US jobs data fueled profit-taking in gold as high interest rates were not impacting the global economy and the US central bank may maintain the rate at elevated levels till June. Earlier, there were expectations for reduction in the rate from March 2024 onwards.

In the US, more-than-projected new jobs of 150,000 were created in November, while the unemployment rate dropped to 2.7% against expectations of a 3.9% reading.

He said the precious metal closed at $2,003 per ounce in the international market on Friday and hoped that the ongoing profit-taking had the potential to take price down to $1,950-1,960 per ounce by Wednesday next week.

Read Rupee rises for sixth day in a row, gold prices drop

The US inflation data, scheduled to be announced on Wednesday, will determine gold’s short-term trajectory.

“The short-term trend is downward.” If it did not extend losses below $2,000 by Wednesday, then it would experience a correction after that, impacting gold price in Pakistan as well.

On the flip side, it may go as high as $2,030-2,040 per ounce next week, he said.

Agar added that gold would test $1,800 on the downside anytime in December 2023 and January 2024, as a correction was overdue since it jumped to $1,870 when the Israel-Palestine war began in November compared to $1,830 before the war.

Global investors will also keep a close watch on the US economic data before taking major investment decisions. Any rate cut from March to June 2024 will encourage gold investors to relocate investment to equity markets internationally.

Besides, the appreciating rupee-dollar exchange rate in Pakistan’s inter-bank market holds the potential to force the local gold pricing body to keep prices low. The rupee-dollar parity plays a pivotal role in determining the metal’s price in local markets.

Published in The Express Tribune, December 10th, 2023.

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