Gold prices rebound; rise by Rs1,600/tola

Gold prices in Pakistan rebounded on Wednesday, driven by a rise in international markets following two sessions of decline. The local price of gold climbed by Rs1,600 per tola, reaching Rs275,900, according to the All Pakistan Sarafa Gems and Jewellers Association.

The recovery mirrors global trends, where gold prices rose 0.8% to $2,653.20 per ounce by 1245 GMT, supported by a weaker dollar and increased speculation of a December rate cut by the US Federal Reserve. US gold futures also rose 1.2% to $2,653.10. Adnan Agar, Director of Interactive Commodities, explained the trend: "In the last two days, gold rose by almost $100, so a pullback was expected as gold remains in an overall bullish trend. Investors often see dips as buying opportunities."

Gold prices had recently dropped sharply, marking their steepest decline in over five months following the Israel-Lebanon ceasefire. However, the dollar index fell 0.6% on Wednesday, making gold more attractive for investors outside the US Market expectations for a December rate cut rose to 66%, up from 55.7%, driven by Federal Reserve minutes highlighting economic uncertainties.

In Pakistan, gold prices have decreased by Rs12,400 per tola since reaching an all-time high of Rs287,900 on October 30, 2024. Globally, geopolitical events such as Israel' war in Palestine and broader trends like de-dollarisation continue to influence long-term gold rates

Physical gold demand has risen on price stabilisation, while other precious metals also saw gains. Silver edged up 0.1% to $30.45 per ounce, platinum rose 0.5% to $932.30, and palladium climbed 0.7% to $984.21.

Meanwhile, the Pakistani rupee continued its losing streak, dropping by a marginal 0.04% to close at 277.96 against the US dollar in the interbank market. Despite challenges such as a fragile law-and-order situation and protests in the capital following a government crackdown on PTI supporters, the rupee has shown resilience fluctuating within the 277-279 range, according to Forex Association of Pakistan Chairman Malik Bostan. He attributed this stability to improved economic indicators and the vibrancy of the Pakistan Stock Exchange (PSX), as the government shifts its reliance from bank loans to equity market financing.

The government has shifted its focus to raising foreign exchange reserves, purchasing $5 billion from the interbank market this fiscal year, in line with International Monetary Fund recommendations. However, pledged investments from friendly nations have yet to materialise, largely due to a lack of competitive opportunities aligned with global trends. Exchange Companies Association of Pakistan (ECAP) reported the local currency appreciating by Rs0.06 on a day-to-day basis, closing at Rs277.15/$ in the open market on the day.