GOLD PER TOLA RATE IN PAKISTAN: On Wednesday, the per tola price of 24 karat gold decreased by Rs.300, settling at Rs.267,700 compared to Rs.268,000 on the previous trading day. Similarly, the price of 10 grams of 24 karat gold fell by Rs.257, reaching Rs.229,510 from Rs.229,767. The price for 10 grams of 22 karat gold also dropped to Rs.210,384 from Rs.210,620, according to the All Sindh Sarafa Jewellers Association.
SILVER PRICES REMAIN UNCHANGED
The prices of silver remained stable with per tola silver priced at Rs.2,950 and 10 grams of silver at Rs.2,529.14.
INTERNATIONAL GOLD PRICE
In the international market, the price of gold decreased by $18, falling to $2,569 from $2,587.
GOLD (XAU/USD) TRADES IN $2,570s AHEAD OF FED POLICY MEETING
On Wednesday, gold (XAU/USD) is trading in the $2,570s as markets await the Federal Reserve’s policy meeting announcement scheduled for 18:00 GMT. Gold hit a record high of $2,589 earlier this week, driven by increased market bets that the Fed will implement a substantial 0.50% cut to interest rates. Such a rate cut is anticipated to be beneficial for gold, as it reduces the opportunity cost of holding the non-interest-bearing asset, making it more attractive to investors.
GOLD PULLS BACK AFTER RETAIL SALES DATA
Gold experienced a decline on Tuesday following the release of US Retail Sales data, which rose by 0.1% in August compared to a 1.0% increase in July. Although this was better than the revised consensus expectations (originally 0.2% gain adjusted to a 0.2% decline), it contributed to gold’s pullback.
FUTURES MARKETS SIGNAL HIGH PROBABILITY OF RATE CUT
Futures markets indicate a 61% probability of a larger 0.50% rate cut by the Fed, while a smaller 0.25% cut has a 39% probability. According to the CME FedWatch tool, the probability of any rate cut is therefore 100%.
Ray Dalio, CIO of Bridgewater Associates, commented on Wednesday that a 25 basis point cut would be appropriate considering the broader economic picture, but a 50 basis point cut may be necessary due to the significant mortgage situation affecting many people. Dalio highlighted that socio-economic and political factors, including political polarization, also play a role in the Fed’s decision-making process.
FED’S SUMMARY OF ECONOMIC PROJECTIONS (SEP) TO BE WATCHED
The Fed’s Summary of Economic Projections (SEP), released alongside the policy statement, will be crucial for understanding future interest rate paths, growth, and inflation forecasts. Any revisions from past SEP projections could introduce volatility in financial markets and affect gold prices.
TECHNICAL ANALYSIS: GOLD PULLS BACK BUT BULLISH TREND CONTINUES
Gold has pulled back to the $2,570-$2,560s range after its recent rally, but the overall trend remains bullish across short, medium, and long-term periods. According to technical analysis principles, the trend is expected to continue with potential short-term corrections.
The Relative Strength Index (RSI) indicates that gold is not currently overbought, suggesting room for further upside. However, if gold enters and exits the overbought zone, it may signal a deeper correction.
SUPPORT AND TARGETS
In the event of a correction, key support levels are at $2,550, $2,544 (0.382 Fibonacci retracement of the September rally), and $2,530 (former range high). If the bullish trend continues, traders might target whole numbers, with $2,600 as a likely initial target for profit-taking.
