GOLD PER TOLA RATE IN PAKISRAN TODAY: Gold prices in Pakistan saw a significant drop on Thursday, with 24-karat gold trading at Rs250,500 per tola, down by Rs2,300. Similarly, the global gold market also experienced a downturn, with gold trading over 1% lower in the $2,370s range. This decline is linked to broader declines in stocks and commodities amid growing concerns about global economic growth. A day earlier gold per tola exhibited a substantial gain. A day earlier gold per tola exhibited a substantial gain.
FACTORS BEHIND THE DECREASE IN GOLD PRICES
TECHNICAL SELLING PRESSURE
Despite being traditionally considered a safe haven, gold has weakened due to technical selling. This occurs when traders react to price patterns and charts, predicting a downward movement within gold’s trading range. Such technical factors can drive prices lower even when fundamental factors might suggest otherwise.
US ECONOMIC DATA IMPACT
Recent data from the United States has also played a role in gold’s decline. The preliminary S&P Global Purchasing Managers’ Index (PMI) for July showed an improvement to 55, up from 54.8 in June. This indicates robust economic growth with moderated inflation, which reduces fears of “stagflation”—a scenario where high inflation and weak economic growth typically boost gold prices.
However, the S&P Global Manufacturing PMI fell to 49.5 from 51.6, while the Services PMI increased to 56.0 from 55.3. These mixed signals suggest a complex economic environment.
COMMENTS FROM ECONOMISTS
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that the PMI data reflect a “Goldilocks” scenario. The economy is growing at a healthy pace while inflation is under control. Williamson also highlighted that rising input costs related to raw materials, shipping, and labor could lead to higher selling prices or squeezed margins if these costs persist.
EXPECTATIONS FOR INTEREST RATE CUTS
Gold’s decline comes despite the expectation that the Federal Reserve will cut interest rates multiple times before the end of the year. Lower interest rates usually make non-interest-bearing assets like gold more appealing, potentially boosting demand. However, current market conditions and technical factors are overshadowing this typical trend.
UPCOMING US ECONOMIC DATA AND POLITICAL IMPACT
TRADERS AWAIT US DATA
Traders are now looking forward to more US economic data to understand the future direction of interest rates. Key releases include the Q2 Gross Domestic Product (GDP) growth data and the Personal Consumption Expenditures (PCE) Price Index report for June. These reports will provide further insights into the Federal Reserve’s policy moves.
POLITICAL SCENARIO
In the political arena, there has been some unwinding of the “Trump trade,” which has led to lower US bond yields, positively impacting gold prices. Recent polls show US Vice President Kamala Harris leading over former President Donald Trump, suggesting a potentially less inflationary economic outlook if she wins.
INCREASED DEMAND FROM INDIA
There is an anticipated rise in physical gold demand from India, the world’s second-largest gold consumer. This expectation follows a reduction in the country’s gold import tax from 15% to 6%, which could drive up gold purchases.
LONG-TERM GEOPOLITICAL FACTORS
Gold is also poised to benefit from long-term geopolitical developments. BRICS+ nations are planning to replace the US Dollar with a gold-backed alternative as the world’s reserve currency. This move aims to reduce the US’s influence in global conflicts and sanctions, potentially boosting gold demand.
TECHNICAL ANALYSIS OF GOLD PRICES
Gold prices are currently fluctuating within a broad trading range. The downtrend is expected to test lower support levels, with the 100-day Simple Moving Average (SMA) around $2,320 acting as a potential support point. The 50-day SMA at $2,360 may offer temporary support as well.
DOMESTIC MARKET UPDATE
In the domestic market, silver prices have also declined. The price for 24-karat silver is now Rs2,860 per tola and Rs2,452 per 10 grams.
