Gold prices in Pakistan continued their upward momentum on Friday, driven by rising international rates. In the local market, the price of gold per tola (11.66 grams) surged by Rs3,000, reaching a new all-time high of Rs280,900, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10-gram gold rose by Rs2,572 to Rs240,826.
This increase follows Thursday’s rise of Rs700, which brought the price to Rs277,900 per tola, a record at the time.
International Gold Rally
Internationally, gold saw a significant surge on Friday, reaching $2,712 per ounce, including a premium of $20. This marked a $30 increase during the day as global markets reacted to geopolitical tensions in the Middle East and uncertainties surrounding the upcoming US elections. These factors, along with the anticipation of lower interest rates globally, fueled demand for gold as a safe-haven asset.
Silver also experienced gains, with prices rising by Rs50 to settle at Rs3,100 per tola in the local market.
Global Drivers of Gold’s Record Rally
The global price of gold breached the $2,700 per ounce level for the first time ever, reflecting the combined influence of economic and geopolitical factors. Heightened demand for safe-haven assets has been driven by Middle East tensions, US election uncertainty, and expectations of looser monetary policies by central banks worldwide.
Traders remain bullish on gold, with many seeing continued upward potential as central banks signal further rate cuts. The European Central Bank (ECB) recently lowered its deposit rate by 25 basis points (bps) for the second consecutive time, and analysts predict more cuts in the coming months. In Japan, the Bank of Japan (BoJ) may hold off on planned rate hikes due to lower-than-expected inflation data, further supporting gold’s appeal.
Other central banks, including those in the UK, Canada, and several Asian countries, are also expected to follow suit with rate cuts, reinforcing gold’s rally.
US Economic Data Adds Complexity
However, gold may face some resistance in the US market, where recent economic data suggests resilience. Stronger-than-expected retail sales and lower-than-expected jobless claims indicate that the US economy is holding steady, which could prompt the Federal Reserve to take a more measured approach to rate cuts. Despite this, markets are still pricing in a 92% chance of a 25 bps cut in the Fed funds rate in November.
Technical Outlook for Gold
From a technical perspective, gold’s breach of the $2,700 level indicates that the market is set for further gains, with the next potential target at $2,750. However, overbought conditions could lead to short-term pullbacks, with support levels at $2,700 and $2,685.
Despite any potential corrections, the broader trend remains bullish as central banks continue to lower interest rates, making gold an attractive option for investors.
