GOLD PER TOLA RATE IN PAKISTAN: Gold prices in Pakistan saw a significant increase on Friday, with 24-karat gold rising by Rs2,700 to reach Rs273,900 per tola, according to the Karachi Sarafa Association. The price of 10 grams of 24-karat gold also surged by Rs2,315, bringing it to Rs234,825.
The price of 22-karat gold followed suit, rising to Rs215,256 per 10 grams in the domestic market, reflecting strong demand and fluctuating market conditions.
While gold prices increased, silver remained stable. The price of 24-karat silver held steady at Rs3,050 per tola and Rs2,615 per 10 grams, showing no change from previous rates.
Global Gold Market
In the international market, spot gold prices also rose. Gold traded near $2,641 per ounce, marking an increase of $8.8 or 0.34% from the previous session, driven by continued investor interest amid global economic uncertainties.
This upward trend in gold prices signals both domestic and global factors at play, as precious metals continue to be a popular hedge against inflation and economic volatility.
Gold Rebounds to $2,630 as Weak US Jobs Data Fuels Fed Rate Cut Speculation
Gold (XAU/USD) regained momentum on Friday, trading back in the $2,630s after the release of disappointing US jobs data bolstered expectations that the Federal Reserve (Fed) will lower interest rates in November. The subpar labor market report signaled potential economic softening, increasing the likelihood of a rate cut, which is generally positive for gold as it reduces the opportunity cost of holding the non-interest-bearing asset.
Gold Surges After US Jobless Claims Spike
The precious metal rebounded on Thursday from just above the critical $2,600 level following a surprising jump in US jobless claims. The US Bureau of Labor Statistics (BLS) reported that initial jobless claims for the week ending October 4 rose to 258,000, significantly higher than the previous week’s 225,000 and exceeding market expectations of 230,000. This increase, which may partly be due to evacuations from Florida ahead of Hurricane Milton, caused US Treasury yields to dip and weakened the US dollar (USD), giving gold a lift.
Additionally, continuing claims for the week ending September 27 increased to 1.861 million, higher than the previous week’s revised 1.819 million and surpassing the 1.830 million estimate. The uptick in jobless claims underscores growing vulnerabilities in the labor market, which could prompt the Fed to prioritize its full employment mandate over inflation control.
Fed Rate Cut Odds Rise Amid Weak Data
In light of the weak jobs data, the probability of the Fed cutting interest rates by 25 basis points (bps) at its November policy meeting rose to 89%, up from 85% earlier, according to the CME FedWatch tool. The likelihood of the Fed leaving rates unchanged fell to 11%. Despite inflation remaining higher than expected—September’s Consumer Price Index (CPI) showed a 2.4% year-over-year (YoY) increase from 2.3% previously, while core CPI climbed to 3.3%—the labor market’s weakness appears to be driving Fed policy expectations.
The Fed’s recent shift in focus, as signaled by Chairman Jerome Powell in August, toward ensuring full employment over curbing inflation has added weight to the argument for a rate cut. The FedTracker tool, which measures policymakers’ tones, also suggested a dovish tilt following a series of speeches by officials earlier this week.
Geopolitical Tensions Add Safe-Haven Demand
Apart from domestic economic data, heightened geopolitical risks may also be contributing to gold’s rally. Escalating tensions in the Middle East, particularly Israel’s intensified bombing of Hezbollah targets in Lebanon, have spurred safe-haven flows into gold. Investors remain on edge as Israel’s potential retaliation against Iran looms large.
Technical Analysis: Gold’s Short-Term Rally
From a technical perspective, gold’s rebound above $2,625 marks a reversal of its recent downtrend, and the short-term outlook suggests sideways movement. If gold continues to climb, it could reach the upper boundary of its current range around $2,670, with $2,653 acting as a key resistance level.
In the medium and long term, gold remains in a bullish trend, and if broader market dynamics align, the precious metal could see further upward momentum.
Outlook: Key Data Ahead
Looking ahead, the release of the US Producer Price Index (PPI) for September and the University of Michigan Consumer Sentiment survey on Friday could influence gold’s near-term movement. However, unless these data diverge significantly from expectations, the impact on gold prices is likely to be limited, as market attention remains focused on the Fed’s interest rate trajectory.
In summary, gold’s recent recovery appears tied to both domestic economic concerns and geopolitical risks, positioning the precious metal for continued gains as investors anticipate a more dovish Fed policy in the near future.
