Gold price slips to Rs241,200 a tola

ISLAMABAD: Gold price decreased by Rs1,500 per tola in the local market in line with an overnight drop in the price of the yellow metal in the international market. According to the data provided by the Karachi Sarafa Association, the price for one tola of 24-karat gold decreased to Rs241,200 from Rs242,700. Similarly, the price for 10 grams of 24-karat gold decreased to Rs206,790 from Rs208,076, showing a dip of Rs1,286. Following suit, the price for 10 grams of 22-karat gold decreased to Rs189,558 from Rs190,736, showing a dip of Rs1,178. The gold price for one tola of 24-karat gold has been kept a significant Rs3,000 below its actual cost due to a reduction in purchasing power, said Karachi Sarafa Association. TLTP
The gold price in the country surged by Rs7,100 per tola in April. It may be noted that the gold price hit an all-time high in Pakistan on April 20 when it reached Rs252,200.
On the other hand, gold futures in the international market as of 1205 hours GMT were available at $2,333.90 per ounce, showing a decrease of $3. Out of the $3 decrease, +$4.9 was due to weakening of the US dollar and -$7.9 was due to predominant sellers, according to the Kitco Gold Index.
From a technical perspective, the 14-day Relative Strength Index (RSI) snapped its bullish momentum and flipped into bearish territory. The RSI lowered below the 50 level, near 48.00, implying more downside for the gold price. However, gold sellers need to crack the 50-day SMA support at $2,324 to initiate a fresh downtrend towards the $2,300 threshold. The next key downside cap is seen at the May 3 low of $2,277.
On the flip side, if the gold price bounces off the 50-day SMA at $2,324, the immediate resistance will be seen at the 21-day SMA support-turned-resistance at $2,353. A sustained move above the abovementioned barrier at $2,372 would provide legs to the recovery, calling for a test of the next topside barrier at the May 24 high of $2,384.