On Thursday, 24-karat gold prices in Pakistan experienced an unprecedented jump to an all-time high; rates increased by Rs800 to reach Rs261,800 per tola. This increase occurred despite being approximately Rs3,000 below their market value.
10-GRAM GOLD PRICES ALSO ON THE INCREASE
Karachi Sarafa Association reports that 24-karat gold prices increased by Rs686, bringing their 10-gram price up to Rs224,451. Likewise 22-karat gold was quoted higher at Rs205,747 per 10-gram.
Prices of Silver Remain Stable
Gold prices surged, yet silver remained stable on the domestic market, remaining steady at Rs2,950 per tola and Rs2,529 per 10-gram.
Global Gold Market Performance.
On a global basis, spot gold was trading near $2,504 an ounce, marking an overall decrease of $8.7 or 0.34% since its previous session.
GOLD HOLDS AT $2,500 AS US YIELDS AND DOLLAR REBOUND
Gold (XAU/USD) has seen a modest rebound on Thursday following its brief dip lower due to US Treasury yields and the US Dollar (USD), traditionally considered to have an adverse correlation with Gold, recovering some of their previous losses seen throughout this week.
U.S. EMPLOYMENT DATA AFFECT GOLD PRICES
On Thursday, US labor market data painted an uneven picture. Initial Jobless Claims exceeded economists’ predictions by coming in higher than anticipated – 232,000 to be exact – exceeding economists’ forecast of 230,000 and an upwardly revised 228,000 figure from last week; while Continuing Jobless Claims came in lower than anticipated at 1.863 million; below both their revised total from last week as well as forecast of 1.870 million claims.
Federal Reserve Minutes Support Gold Bullion.
Gold prices remain broadly supported by weakening US economic data, and traders closely monitor its outlook and future interest rate decisions as key determinants for Gold prices. Lower interest rates make gold more appealing by decreasing opportunity costs associated with holding non-yielding assets such as gold.
The Federal Reserve’s July meeting minutes, released Wednesday, indicated a growing consensus among Fed members to reduce interest rates. Some members even proposed cutting rates by 0.25% – though ultimately decided against this action – in July but ultimately voted against it. Most members agreed that an interest rate cut will likely become necessary in September given current economic trends; these minutes have reinforced market expectations of one in September with 0.25% cuts being fully priced into markets while larger 0.50% cuts have seen their probability increase to 34.5% as reported by CME FedWatch Tool data.
Labor Market Weakness Provides Support to Gold Investment
Recent US labor market concerns have also added support to Gold prices. The Bureau of Labor Statistics (BLS) released preliminary revisions to Nonfarm Payrolls (NFP) data for the 12 months leading up to March 2024 that showed a downward revision of 818,000 jobs – representing 68,000 less payrolls each month and dropping average monthly pace from 242,000 to 174,000; although these numbers do indicate slowing economy trends they put downward pressure on yields and USD, which benefits Gold.
Key Data and Events to Keep an Eye Out for
Investors will closely follow the US S&P Global preliminary Purchasing Manager Index (PMI) data for August, which measures activity levels across various industries, as a crucial measure of economic health. Furthermore, Fed Chairman Jerome Powell’s speech at Jackson Hole symposium this Friday could prove especially revealing for gold traders.
Technical Analysis: Gold Remains Bullish in Spite of Pullback
Gold (XAU/USD) remains in an overall bullish trend despite recent pullback from new all-time highs. A breakout from trading range on August 14 has established an upside target of around $2,550 calculated using the 0.618 Fibonacci ratio of the range’s height; this represents minimum expectations based on technical analysis; its presence suggests the market favors long positions over short ones.
