On Tuesday, the price of 24-karat gold in Pakistan saw a significant rise, reaching Rs273,000 per tola, an increase of Rs1,100 from the previous session. This rise in gold prices reflects the global trend, where gold continues to trade steadily at elevated levels.
GLOBAL GOLD PRICES NEAR $2,632 PER OUNCE
Globally, spot gold traded near $2,632 an ounce, showing a modest rise of $6.1, or 0.23%, from the previous trading day. The consistent upward momentum of global gold prices is influencing the local markets in Pakistan, pushing gold per tola prices higher.
GOLD PRICE PER 10-GRAM IN PAKISTAN INCREASES
According to the Karachi Sarafa Association, the price of 24-karat gold per 10-gram also saw an upward adjustment, with the new price standing at Rs234,053, an increase of Rs943. Similarly, the price of 22-karat gold per 10-gram rose to Rs214,550, reflecting the ongoing bullish trend in the gold market.
SILVER PRICES REMAIN STABLE IN THE DOMESTIC MARKET
While gold per tola continues to rise, silver prices remained steady in Pakistan’s domestic market. 24-karat silver was sold at Rs2,950 per tola and Rs2,529 per 10-gram, showing no change from the previous session.
GOLD (XAU/USD) HITS NEW RECORD HIGH OF $2,640 PER OUNCE
Gold prices surged to a new record high of $2,640 per troy ounce on Tuesday, breaking its previous all-time high. This sharp rally was driven by growing market expectations of more aggressive interest rate cuts from the Federal Reserve (Fed) and an expansive stimulus package from China.
As the market anticipates further rate cuts by the Fed, the attractiveness of holding gold increases, especially given that lower interest rates reduce the opportunity cost of non-yielding assets like gold. The CME FedWatch Tool currently indicates a 50.2% chance of a 50 basis point (bps) rate cut in November, compared to a 49.8% chance for a smaller 25 bps cut.
Fed officials’ comments are adding to this momentum. While some, like Fed Bank of Atlanta President Raphael Bostic, remain neutral, others, such as non-voting Atlanta Fed President Austan Goolsbee, are striking a more dovish tone. Goolsbee emphasized that inflation has “come way down” and hinted at many more cuts on the horizon, pushing gold prices higher.
CHINA’S STIMULUS DRIVE FUELS GOLD RALLY
The People’s Bank of China (PBoC) also played a crucial role in gold’s ascent. On Tuesday, the PBoC introduced its largest stimulus package since the Covid-19 pandemic, aimed at combating deflation and revitalizing economic growth. The measures include a 20 basis point cut to the seven-day reverse repo rate and additional cuts to the medium-term lending facility and prime rates. Furthermore, the PBoC announced a reduction in the Reserve Requirement Ratio (RRR) by 50 bps, freeing up approximately 1 trillion yuan for new lending.
This major stimulus package is fueling confidence in China’s economy and increasing demand for gold, as China represents the world’s largest gold market.
GEOPOLITICAL TENSIONS IN THE MIDDLE EAST SUPPORT SAFE-HAVEN DEMAND
Escalating tensions in the Middle East are also driving safe-haven flows into gold. Overnight, Israel intensified its bombing of Hezbollah targets in Lebanon, leading to rising casualties. The conflict has the potential to escalate further, which could send gold prices even higher as investors flock to safe assets amidst geopolitical instability.
TECHNICAL ANALYSIS: GOLD’S NEW HIGH AT $2,640
Gold’s breakout to new highs reinforces its ongoing bullish trend. As per technical analysis, with gold in a long, medium, and short-term uptrend, further price increases are likely. Analysts suggest that the “trend is your friend” principle points to additional upside for gold.
