After a sharp decline on Thursday, 24-karat gold prices in Pakistan rebounded by Rs2,000 on Friday, bringing the price to Rs278,800 per tola. This recovery follows a 25 basis point rate cut by the US Federal Reserve, which eased the opportunity cost of holding non-yielding assets like gold. This dovish shift in Fed policy has sparked renewed interest in bullion despite pressure from a stronger US dollar.
Key Market Factors
- Federal Reserve Rate Cut: The Fed lowered its benchmark rate to a range of 4.50%-4.75%, signaling a focus on supporting employment alongside managing inflation. The rate cut has generally been positive for gold, helping prices rally.
- US Dollar Demand and Economic Growth Hopes: Hopes that President Trump’s policies might spur economic growth and inflation have bolstered the US dollar, typically a bearish factor for gold. However, retreating US Treasury yields helped limit dollar gains, balancing out some downward pressure on gold.
- Chinese Economic Stimulus: Speculation around China potentially announcing further economic stimulus after its National People’s Congress Standing Committee meeting has added to the overall bullish sentiment for gold, especially in the context of global uncertainty.
International Gold Prices and Technical Outlook
Internationally, spot gold gained 1.79% to settle at $2,706 per ounce, a sign of underlying support from safe-haven buying and the Fed’s recent dovish tone. However, in early European trading on Friday, gold prices (XAU/USD) slipped slightly to the $2,680 region amid the strong dollar and risk-on sentiment in equity markets.
From a technical perspective:
- Resistance Levels: Gold faces resistance near the $2,718 level (50% Fibonacci retracement). A move above this level could push prices toward $2,734 and possibly the $2,750 range.
- Support Levels: Immediate support is seen around $2,672, with a stronger floor near $2,643 (50-day SMA). A break below this level could accelerate losses toward $2,605.
Domestic Market Update
- 24-Karat Gold: Rs278,800 per tola, up by Rs2,000.
- 22-Karat Gold: Rs219,107 per 10 grams.
- Silver: Prices remained stable at Rs3,300 per tola and Rs2,829 per 10 grams.
With the Fed’s dovish policy stance providing a short-term boost, gold could see continued volatility based on economic data releases and any policy updates.
