Gold prices in Pakistan continued their upward trend on Thursday, following a surge in international rates. The price of gold per tola increased by Rs1,500, reaching a record high of Rs277,000, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
10-GRAM GOLD PRICE ALSO INCREASES IN PAKISTAN
Alongside the rise in per tola prices, 10-gram gold saw an increase of Rs1,285, selling at Rs237,482. This marks a consecutive day of rising prices, with Wednesday’s rate having already climbed by Rs2,500 to settle at Rs275,500.
INTERNATIONAL GOLD PRICES ALSO ON THE RISE
In line with the local market, international gold rates increased as well. On Thursday, the global price of gold stood at $2,665 per ounce, up by $12, as reported by APGJSA. The global price includes a premium of $20 per ounce.
SILVER PRICES STABLE DESPITE GOLD PRICE HIKE
While gold prices surged, silver prices remained stable at Rs3,050 per tola in the local market.
GOLD PRICE DRIVERS: GEOPOLITICAL TENSIONS AND GLOBAL DEMAND
Experts attribute the surge in gold prices to a range of international factors. Escalating geopolitical tensions, especially in the Middle East, combined with interest rate cuts by the U.S. Federal Reserve and increasing demand from major markets like China and India, are driving the gold price hikes both globally and in Pakistan.
GOLD PRICES RISE AMID FALLING GLOBAL INTEREST RATES AND MIDDLE EAST CONFLICT
Gold (XAU/USD) is trading higher in the $2,660s per troy ounce on Thursday, supported by a combination of falling global interest rates, escalating conflict in the Middle East, and a weaker US Dollar (USD). These factors have driven investor interest in the safe-haven asset as markets anticipate further monetary easing by the US Federal Reserve (Fed).
GOLD TRADES NEAR RECORD HIGHS
Gold is trading just below its record high of $2,670, recorded on Wednesday. Recent rate cuts by central banks, including the People’s Bank of China (PBoC), the Swedish Riksbank, and the Central Bank of the Czech Republic, have made gold more attractive by reducing the opportunity cost of holding the non-yielding asset. Lower interest rates generally benefit gold, as it becomes a more appealing investment compared to interest-bearing assets.
MIDDLE EAST CONFLICT DRIVING SAFE-HAVEN DEMAND
The escalation of the conflict between Israel and Hezbollah is further fueling gold’s rise. On Wednesday, Israeli Defence Forces head Herzi Halevi advised troops to prepare for a ground offensive in Lebanon. Any increase in military activity could elevate risk aversion in the market, leading to more demand for safe-haven assets like gold.
FED RATE CUT EXPECTATIONS BOOST GOLD PRICES
Expectations of a 50 basis points (bps) interest rate cut by the US Federal Reserve at its upcoming November meeting have also buoyed gold prices. According to the CME FedWatch tool, the market has priced in a 60% probability of a substantial 50 bps rate cut. The weaker US Dollar, largely driven by these expectations, has provided additional support for gold, which is priced in USD.
Despite some positive US economic data, including higher-than-expected New Home Sales and robust Mortgage Applications in August, the US economy is still not out of the woods. On Tuesday, the Conference Board’s Consumer Confidence Index fell to 98.7 in September, raising concerns about the labor market.
FED OFFICIAL COMMENTS AND TECHNICAL OUTLOOK
Fed Governor Adriana Kugler’s dovish remarks on Wednesday added further support to gold prices. Market watchers are now awaiting comments from Fed Chairman Jerome Powell, which could impact future rate expectations and gold prices.
GOLD TECHNICAL ANALYSIS: CONSOLIDATING BELOW RECORD HIGHS
Gold is currently consolidating just below its all-time high of $2,670, maintaining an uptrend across short, medium, and long-term charts. Although the Relative Strength Index (RSI) indicates overbought conditions, signaling a potential pullback, gold could continue to trend higher. A break above the $2,670 record high would confirm the uptrend and set new targets at $2,700 and $2,750.
However, if a correction occurs, key support levels are found at $2,600, $2,550, and $2,544 (the 0.382 Fibonacci retracement of September’s rally).
