GOLD PER TOLA RATE IN PAKISTAN: On Thursday, the per tola price of 24 karat gold increased by Rs.800, selling at Rs.268,500, compared to Rs.267,700 from the previous trading day. Similarly, 10 grams of 24 karat gold rose by Rs.685, reaching Rs.230,195, while the price of 10 grams of 22 karat gold went up to Rs.211,012 from Rs.210,384, according to the All Sindh Sarafa Jewellers Association.
Silver prices remained stable, with per tola silver priced at Rs.2,950 and 10 grams at Rs.2,529.14. In the international market, gold prices increased by $8, rising to $2,577 from $2,569.
GOLD (XAU/USD) EDGES HIGHER AFTER FED’S 50 BPS RATE CUT
Gold (XAU/USD) rebounded on Thursday, trading back in the $2,580s after briefly dropping to the $2,540s following the U.S. Federal Reserve’s much-anticipated decision to cut interest rates by 50 basis points (0.50%) the previous day. This pushed the Fed’s base rate down to a range of 4.75%-5.25%, compared to 5.25%-5.50% before.
GOLD PEAKS AT RECORD HIGH OF $2,600 BEFORE PULLBACK
Gold reached a new record high of $2,600 after the Fed’s announcement of the 50 bps rate cut on Wednesday but failed to maintain these highs. Analysts attributed the lack of volatility to the fact that markets had already priced in the Fed’s easing cycle ahead of the meeting.
Thomas Mathews, Head of Markets, Asia Pacific for Capital Economics, noted, “Markets barely reacted to the Fed’s 50 bps rate cut, on balance, and our base case is that further cuts won’t move the needle too much either.”
FED SEES LIMITED DOWNSIDE IN U.S. ECONOMY
Despite the larger-than-expected rate cut, the Fed’s revised economic outlook appeared relatively positive. Gross Domestic Product (GDP) growth for 2024 was only slightly downgraded to 2.0% from 2.1%, and it is projected to hold steady at that level until 2027. However, labor market concerns were raised, with the Fed revising its Unemployment Rate forecast up to 4.4% in 2024-2025.
Jim Reid, Global Head of Research at Deutsche Bank, remarked, “Accompanying the larger cut was a signal of a fundamentally strong U.S. economy with no suggestion that continued 50 bps cuts were likely.”
LABOR MARKET OUTLOOK AND GOLD’S HAVEN STATUS
While the labor market remains a concern, with the unemployment rate expected to stay elevated through 2027, the jobless claims remain at low levels. Janet Henry, Global Chief Economist at HSBC, emphasized that labor market metrics are lagging indicators and high immigration in the U.S. may be impacting the unemployment figures rather than underlying weakness.
“If we get a shocking payrolls in November, then we might be back to talking about another 50 bps cut,” said Henry.
TECHNICAL ANALYSIS: GOLD RECOVERY IN PROGRESS
Gold is rebounding after a volatile session that saw prices surge to $2,600 and then fall to the $2,540s. The metal is recovering and is already up nearly 1% for the day.
The trend remains bullish across short, medium, and long-term charts. If Gold breaks above $2,600, it could signal the continuation of the uptrend, with potential targets at $2,650 and $2,700.
However, should Gold’s RSI (Relative Strength Index) enter the overbought zone, traders may want to avoid adding long positions. A deeper correction could be in play if Gold fails to break above key resistance levels.
Key support levels include $2,550, $2,544 (0.382 Fibonacci retracement of the September rally), and $2,530.
