The price of gold in Pakistan decreased on Thursday, with 24-karat gold being sold at Rs263,000 per tola, a drop of Rs1,000 from the previous day. This decline comes after gold surged to an all-time high in the country earlier this week. So far in 2024, the yellow metal has increased by Rs43,000 or 19.6%, as traders anticipate the start of US Federal Reserve monetary easing next week.
KARACHI SARAFA ASSOCIATION REPORTS LOWER GOLD PRICES
The Karachi Sarafa Association reported a decline in the price of 24-karat gold per 10 grams, which is now quoted at Rs225,480, down by Rs857. Meanwhile, the price of 22-karat gold dropped to Rs206,690 per 10 grams.
SILVER PRICES REMAIN UNCHANGED
Unlike gold, silver prices remained steady in the domestic market, with 24-karat silver being sold at Rs2,900 per tola and Rs2,486 per 10 grams.
GLOBAL GOLD MARKET UPDATE
On the global front, spot gold traded near $2,515 per ounce, showing a slight increase of $3.6 or 0.14% compared to the previous session, reflecting ongoing global demand for the precious metal.
GOLD EYES US PRODUCER PRICE INDEX AND ECB MEETING IMPACT
Gold (XAU/USD) continues to trade within its established range, hovering just below its all-time high on Thursday as traders await more US inflation data, this time in the form of the Producer Price Index (PPI) for August. The PPI could further shape expectations for the trajectory of US interest rates, influencing both Gold and the US Dollar (USD).
Additionally, the European Central Bank (ECB) meeting scheduled for Thursday could significantly impact Gold prices, depending on the ECB’s approach to economic easing. A revision of economic growth and inflation forecasts, especially in light of weak data from Germany, could trigger more volatility.
MARKET SENTIMENT SHIFTS TO RISK-ON
Market sentiment has turned positive following gains in Asian stocks and commodities overnight, and similar movements in European markets. This upbeat sentiment could reduce the demand for safe-haven assets like Gold, further weighing on its price.
GOLD DROPS ON STRONGER US INFLATION DATA
Gold prices dipped on Wednesday, sliding to $2,500 after the release of the US Consumer Price Index (CPI) data for August. A higher-than-expected increase in core CPI at 0.3%—versus expectations of 0.2%—triggered a selloff in Gold as traders reduced the likelihood of the Federal Reserve making a larger 0.50% interest rate cut in their upcoming meeting.
The stronger core inflation numbers reduced Gold’s appeal as a non-yielding asset, while bolstering the US Dollar.
PPI, ECB MEETING TO DRIVE FURTHER PRICE ACTION
Thursday’s PPI data release and the ECB meeting will likely impact market sentiment, guiding interest rate expectations, a key driver for Gold prices. US jobless claims data will also be critical, given the Fed’s focus on the weakening labor market.
TECHNICAL ANALYSIS: GOLD HOLDS NEAR ALL-TIME HIGH
MULTIPLE ATTEMPTS AT RANGE HIGHS SIGNAL POTENTIAL BREAKOUT
Gold (XAU/USD) remains within a multi-week sideways range, after briefly testing the all-time high of $2,531 on Wednesday. The chart shows multiple touches to the top of this range, which suggests that any eventual breakout above this ceiling could be sharp and volatile.
LONG-TERM BULLISH TREND INTACT
Despite the current sideways movement, the longer-term trend remains bullish, with a target of $2,550. A break above the August 20 all-time high of $2,531 would confirm a continuation higher toward this target.
However, if Gold closes below $2,460, it could alter the bullish outlook and raise questions about the strength of the current trend.
