After increasing for three consecutive sessions, gold prices in Pakistan declined on Monday, reflecting a similar drop in international markets. The price of gold per tola fell by Rs600, bringing it down to Rs271,900 according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
10-GRAM GOLD ALSO SEES A PRICE DROP
In addition, the price of 10-gram gold decreased by Rs471, now standing at Rs233,110. The drop comes after a steady climb over the past week, where gold prices reached a record high.
INTERNATIONAL GOLD RATES ALSO DECLINE
On the international front, gold prices also plunged on Monday. According to the APGJSA, the international rate of gold stood at $2,617 per ounce (including a $20 premium), marking a loss of $5 for the day.
SILVER PRICES REMAIN STABLE
Meanwhile, silver prices remained stable in the local market, holding at Rs2,950 per tola.
The drop in gold prices comes after reaching a record high of Rs272,500 per tola in Pakistan on Saturday.
GOLD PRICE REACHES RECORD HIGH AS U.S. DOLLAR WEAKENS
The price of gold (XAU/USD) surged to a record high on Monday, driven by a softer U.S. dollar and expectations that the Federal Reserve (Fed) will continue its monetary easing cycle with deeper rate cuts this year. Gold, which offers no interest yield, tends to benefit when rates are cut as it becomes more attractive compared to interest-bearing assets.
Rising geopolitical tensions in the Middle East, particularly the escalation between Hezbollah and Israel, are also fueling demand for safe-haven assets like gold. Investors are allocating more resources towards gold as a hedge against instability.
US PMI DATA COULD IMPACT GOLD PRICE
Traders are also closely monitoring the flash reading of the US Purchasing Managers Index (PMI) data, due later on Monday. A stronger-than-expected outcome could strengthen the U.S. dollar and potentially weigh on the USD-denominated gold price.
TECHNICAL ANALYSIS: GOLD EYES $2,700 AS OVERBOUGHT CONDITIONS SIGNAL CONSOLIDATION
From a technical perspective, gold is maintaining a strong bullish trend, with prices well-supported above the key 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) currently stands near 70.50, indicating an overbought condition, suggesting that the market may experience some consolidation before further gains.
Gold is approaching a major resistance level at $2,625, and a decisive break above this could lead to a push towards the $2,700 psychological level. On the downside, the first key support is seen at $2,600. If breached, the price could retreat to the next support level at $2,560 and further down to $2,485, the low recorded on September 6.
FED OFFICIALS REMAIN CAUTIOUS ON RATE POLICY
Last week, several Federal Reserve officials provided insights into the central bank’s thinking. Fed Governor Christopher Waller supported the Fed’s decision to cut interest rates by an accelerated 50 basis points (bps), though he mentioned the possibility of a pause depending on upcoming data. Fed Governor Michelle Bowman emphasized the need for a cautious approach to rate adjustments, signaling that the Fed is not yet confident about meeting its inflation targets.
