GOLD PER TOLA RATE IN PAKISTAN TODAY: On Friday, the price of 24 karat gold experienced a significant increase of Rs. 1,000 per tola, reaching Rs. 251,500. This is a notable rise from its previous value of Rs. 250,500 recorded on the last trading day.
PRICE CHANGES IN GOLD AND SILVER
The cost of 10 grams of 24 karat gold also saw an uptick, rising by Rs. 858 to Rs. 215,621 from Rs. 214,763. Similarly, 10 grams of 22 karat gold climbed to Rs. 197,652 from Rs. 196,866, according to the All Sindh Sarafa Jewellers Association. On the other hand, silver prices remained stable, with per tola and ten grams staying at Rs. 2,860 and Rs. 2,451.98, respectively.
INTERNATIONAL GOLD MARKET TRENDS
Globally, the price of gold increased by $3, reaching $2,473 from $2,470. This rise comes after gold bounced back from the 50-day Simple Moving Average (SMA), recovering from a sharp decline the previous day. On Thursday, gold prices dropped by over 1.0% due to concerns about global economic growth, impacting the broader commodities market.
FED’S INFLATION GAUGE AND GOLD VOLATILITY
Gold’s volatility may continue as the market anticipates the release of the core Personal Consumption Expenditures (PCE) Price Index in the US, the Federal Reserve’s preferred measure of inflation. The results of this data could influence interest rate expectations in the US, potentially affecting gold prices.
Currently, the Fed is expected to reduce interest rates by 0.25% in September, lowering them from 5.50% to 5.25%. Additional cuts of 0.25% are anticipated before the year ends, contingent on inflation trends. The core PCE was last recorded at 2.6% year-over-year in May, with economists predicting a decrease to 2.5% for June. A significant drop in this index might prompt further interest rate cuts, while a higher result could reduce this likelihood.
MARKET PRESSURES AND ASIAN DEMAND
Analysts at TD Securities note that gold may face continued pressure from an imbalance of long positions and reduced demand from Asia. A high number of long positions often leads to a sell-off as the market adjusts.
INSIGHT FROM TD SECURITIES
Daniel Ghali, Senior Commodity Strategist at TD Securities, highlights that macro trader positioning appears excessive relative to rate market expectations for Fed cuts. He also points to signs of reduced buying activity in Asia, evidenced by a decline in the Shanghai Gold Exchange (SGE) premium and emerging signs of liquidations from top precious metals traders in Shanghai.
ASIAN CENTRAL BANKS AND GOLD DEMAND
Asian central banks, which traditionally hoard gold to hedge against currency depreciation, have reduced their gold purchases due to the recent weakening of the US Dollar and the strengthening of their own currencies. Significant liquidations from Shanghai Futures Exchange (SHFE) gold and silver traders have also been observed, adding downward pressure on prices.
TECHNICAL ANALYSIS: SUPPORT AT 50-DAY SMA
Technically, gold is navigating a new downtrend within a broad range established since May. Currently, gold is in a sideways market rather than a directional trend. The price has found support at the 50-day SMA at $2,360, with a slight bounce. If gold prices fall below this SMA, they may continue to decline to the next support level at the 100-day SMA, around $2,320.
