GOLD PER TOLA RATE IN PAKISTAN TODAY– The price of gold in Pakistan surged to an all-time high on Thursday, with 24-karat gold jumping Rs4,600 per tola to reach Rs254,000. This significant increase comes amid speculations that the US central bank may soon lower interest rates due to signs of slowing inflation. Historically, high interest rates negatively impact gold, which does not bear interest.
The Karachi Sarafa Association reported that the price of 24-karat gold is now Rs217,764 per 10 grams, reflecting an increase of Rs3,944 per 10 grams. The price of 22-karat gold also saw a rise, quoted at Rs199,617 per 10 grams.
Interestingly, despite this surge, the gold price has been kept Rs4,000 below its actual cost, attributed to a reduction in purchasing power.
In contrast, silver prices remained stable in the domestic market. The price of 24-karat silver was steady at Rs2,900 per tola and Rs2,486 per 10 grams.
On the global stage, spot gold hovered near $2,468 an ounce, after surpassing the previous all-time peak set in May.
GOLD PRICE NEAR RECORD HIGHS AMID FED RATE CUT SPECULATION
The gold price (XAU/USD) edged higher to near $2,470 per troy ounce on Thursday, maintaining its position close to record highs. This upward trend is driven by growing optimism that the Federal Reserve (Fed) will reduce interest rates in September. Lower interest rates typically make non-yielding assets like gold more attractive to investors.
Federal Reserve officials have expressed increased confidence that inflation rates are aligning more closely with policymakers’ goals. Fed Governor Christopher Waller stated on Wednesday that the US central bank is ‘getting closer’ to an interest rate cut. Richmond Fed President Thomas Barkin also noted that the easing in inflation has begun to broaden and expressed a desire to see this trend continue.
According to CME Group’s FedWatch Tool, there is now a 93.5% probability of a 25-basis point rate cut at the September Fed meeting, up from 69.7% a week earlier. Traders are closely watching the US weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and a speech by Fed’s Lorie Logan for further economic indicators.
The US Dollar Index (DXY), which measures the value of the US Dollar against six other major currencies, has rebounded due to improved US Treasury yields. The DXY trades around 103.80, with yields on 2-year and 10-year US Treasury bonds standing at 4.45% and 4.17%, respectively. This scenario may limit the upside of gold prices.
DAILY DIGEST MARKET MOVERS
Gold’s rise is influenced by dovish sentiment surrounding the Fed. The New York Times reported that former President Donald Trump, in a meeting with House Republicans, expressed support for tax reductions, lower interest rates, and increased tariffs—measures that could potentially be inflationary and weaken the US Dollar, boosting demand for dollar-denominated gold. In a Bloomberg News interview, Trump cautioned Fed Chair Jerome Powell against cutting rates before November’s presidential vote but suggested he would allow Powell to complete his term if he continues to “do the right thing.”
Federal Reserve Board of Governors member Dr. Adriana Kugler acknowledged that while inflationary pressures have eased, the Fed still needs additional data to justify a rate cut. The US Retail Sales for June stayed mostly in line with expectations, holding steady at $704.3 billion, indicating stable economic activity.
Fed Chair Jerome Powell mentioned on Monday that the three US inflation readings of this year “add somewhat to confidence” that inflation is on course to meet the Fed’s target sustainably, suggesting that a shift to interest rate cuts may not be far off.
TECHNICAL ANALYSIS: XAU/USD ASPIRES TOWARD $2,500
Gold price is trading around $2,470, consolidating within an ascending channel, indicating a bullish bias. The 14-day Relative Strength Index (RSI) is positioned slightly below the 70 level, confirming a bullish trend but also suggesting the asset may be overbought. A short-term correction could be expected.
The XAU/USD pair is testing the upper boundary of the ascending channel around the $2,470 level. A breakthrough above this level could lead the pair to test the psychological $2,500 level.
On the downside, the nine-day Exponential Moving Average (EMA) at the $2,424 level could provide immediate support, followed by the lower boundary of the ascending channel at the $2,410 level. A break below this could exert downward pressure on the XAU/USD pair, potentially bringing it to the $2,290 support area.
As gold prices edge higher, market participants will continue to closely monitor economic indicators and Fed announcements, which play a crucial role in determining the future trajectory of the precious metal.
