Friday marked a significant upturn for gold investors in Pakistan, as the price of 24-karat gold surged by Rs1,400 per tola, reaching an impressive Rs217,700. This notable increase is a welcome development for the domestic bullion market, which faced a downward trend earlier in January 2024.

Moreover, Karachi Sarafa Association provided updated figures, highlighting that 10-gram 24-karat gold rose by Rs1,201 from the previous day, standing at Rs186,643. Additionally, the 10-gram 22-karat gold’s price was reported at Rs171,089, indicating a strong market performance.

SILVER PRICES HOLD STEADY

Contrastingly, silver prices in the domestic market have shown stability, with 24-karat silver priced at Rs2,600 per tola and Rs2,229.08 per 10-gram. This steadiness in silver rates contrasts with the dynamic movements observed in the gold market.

INTERNATIONAL INFLUENCES AND FEDERAL RESERVE’S STANCE

RISING INTERNATIONAL GOLD PRICES

The domestic market’s upward trajectory follows a continuous increase in international gold prices. Gold has been on a bullish streak, with the international spot gold rising for four consecutive days, culminating in a gain of over $15 in the last session. This momentum positions the spot rate at $2,055.79, eyeing the largest weekly rise since December.

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XAUUSD_2024-02-02_17-01-31

FED CHAIR JEROME POWELL’S INSIGHTS

The recent comments by Fed Chair Jerome Powell have been pivotal in shaping market sentiments. Despite dismissing the notion of interest rate cuts in the spring, Powell expressed confidence in achieving the 2% inflation target. These remarks, as reported by Reuters, have underlined a supportive backdrop for gold’s resilience.

MARKET ANALYST PERSPECTIVES

Carlo Alberto De Casa, a market analyst at Kinesis Money, emphasized that the Federal Reserve’s stance has not deterred the bullish momentum for gold. The prevailing market consensus is that interest rates are expected to decline within the year, further enhancing gold’s appeal as a safe-haven asset amidst economic uncertainties.

CONCLUSION: NAVIGATING THROUGH ECONOMIC SIGNALS

The price of gold (XAU/USD) is on track for a significant weekly increase, driven by investors embracing the narrative of impending rate cuts in the U.S., despite recent uncertainties about when these cuts will occur.

In its most recent monetary policy statement, the Federal Reserve (Fed) cited a lack of clear evidence that inflation would consistently return to the 2% target, but did not specifically address possible rate reductions. However, the Federal Reserve’s most recent Summary of Economic Projections (SEP) made it abundantly evident that interest rates would drop by 75 basis points (bps) in 2024.

Gold prices could fluctuate in the coming period, especially since the Nonfarm Payrolls (NFP) data for January are scheduled to be released at 13:30 GMT by the US Bureau of Labour Statistics (BLS). With expectations that the labour market’s demand has cooled and wage growth has slowed due to the Fed’s protracted policy of maintaining high interest rates, the market is ready for this report.

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