Gold prices in Pakistan surged to a new record on Friday, with 24-karat gold selling at Rs272,000 per tola, after a significant increase of Rs3,500. This surge mirrors the global rally in gold prices, driven by market reactions to the US Federal Reserve’s recent interest rate cut.
The Karachi Sarafa Association reported that 24-karat gold reached Rs233,196 per 10-gram, reflecting a jump of Rs3,001. Similarly, 22-karat gold prices rose to Rs213,763 per 10-gram.
GLOBAL GOLD PRICES SOAR TO NEW HEIGHTS
In the international market, spot gold hit an all-time high of $2,614 per ounce, marking an increase of $26.9 or 1.04%from the previous session. This uptick came after the Federal Reserve slashed interest rates by 50 basis points, sparking demand for the yellow metal as a safe-haven asset.
SILVER PRICES REMAIN STABLE
In contrast to gold, silver prices remained unchanged in Pakistan. 24-karat silver continued to sell at Rs2,950 per tolaand Rs2,529 per 10-gram, according to the latest reports from local markets.
GOLD SURGES TO NEW RECORD HIGH AS CENTRAL BANKS FOLLOW FED IN CUTTING RATES
GLOBAL RATE CUTS BOOST GOLD PRICES TO NEW HIGH ABOVE $2,610
Gold (XAU/USD) skyrocketed to a fresh all-time high in the $2,610s on Friday as investors responded to a wave of interest rate cuts by global central banks, echoing the US Federal Reserve’s (Fed) recent move. Lower interest rates increase the appeal of non-interest-bearing assets like gold by reducing the opportunity cost of holding them.
Following the Fed’s decision to cut interest rates by 50 basis points (bps) on Wednesday, several other central banks followed suit. The South African Reserve Bank (SARB) slashed its key rate by 25 bps, while the Central Bank of the Philippines made a significant cut of 250 bps, reducing rates to 7.0%. Speculation is mounting that the Reserve Bank of India (RBI) will join the trend in its upcoming meeting.
CENTRAL BANK ACTIONS SUPPORT GOLD UPTREND
While the People’s Bank of China (PBoC) left its rates unchanged at Friday’s meeting, the bank’s earlier surprise rate cut in July has left its key lending rates at record lows. Similarly, the Bank of Japan (BoJ) opted to hold its rates steady, despite speculation of a hike. These global monetary easing moves have provided additional support for gold prices.
US OUTLOOK LIMITS GOLD UPSIDE, GEOPOLITICAL RISKS PROVIDE SAFE-HAVEN SUPPORT
Despite the surge, gold’s upside was partially capped by the Fed’s optimistic outlook for US economic growth, which remains stable at around 2.0% per year until 2027. This outlook suggests a “soft landing” for the economy, potentially limiting safe-haven flows into gold.
However, geopolitical tensions, particularly in the Middle East, could continue to drive demand for gold as a safe-haven asset. The rising conflict involving Israel and Hezbollah has the potential to escalate, contributing to risk aversion in global markets.
TECHNICAL ANALYSIS: GOLD BREAKS NEW HIGH, EYES $2,650 TARGET
Gold broke through the previous high of $2,600, setting a new record as the yellow metal continues to extend its uptrend. The technical analysis principle, “the trend is your friend,” suggests further upside potential for gold in the long, medium, and short-term trends.
Next Targets
- The next resistance levels are $2,650 and $2,700, both significant psychological round numbers.
- Gold’s Relative Strength Index (RSI) is not yet in the overbought zone, leaving room for further gains.
Potential Correction
- If gold’s RSI enters and then exits the overbought zone, it may signal a deeper correction. In that case, traders should watch for key support levels at $2,550, $2,544 (0.382 Fibonacci retracement), and $2,530 (former range high).
