Gold holds steady ahead of Federal Reserve decision

Gold prices in Pakistan remained unchanged on Monday, holding near record highs, as global investors awaited a key US Federal Reserve policy decision later this week.

According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold per tola stood firm at Rs386,300, while 10 grams held steady at Rs331,189. In the international market, gold was quoted at $3,643 per ounce (including a $20 premium). Silver also traded flat, with the per-tola rate unchanged at Rs4,443.

The stability followed Saturday's movement when the local gold price stood near record at Rs386,300 after slipping by Rs200.

Internationally, bullion hovered close to all-time highs, buoyed by a weaker dollar and falling Treasury yields. Traders are closely watching the upcoming Federal Open Market Committee (FOMC) meeting, which could set the trajectory for interest rates and, by extension, gold prices for the rest of 2025.

Interactive Commodities Director Adnan Agar said the global gold market remained on an upward trend, having touched the high of $3,685 and was later trading around $3,680. He explained that expectations of lower US interest rates were fueling demand.

"If the Fed chairman lowers the interest rate, gold will go up because cheaper borrowing costs allow more investment. On top of that, concerns over a weakening US labour market are adding to the bullish sentiment," he noted.

Agar added that while gold was technically overbought, a meaningful correction was unlikely before the FOMC decision. "If a pullback comes, it may dip towards $3,600, but the broader trend remains upward," he said.

Market watchers now await Wednesday's Fed announcement, which could determine whether gold pushes further into the record territory or finally sees a correction. Meanwhile, the Pakistani rupee continued its upward trajectory against the US dollar on Monday, marking its 27th consecutive gain in the inter-bank market. At close, the local currency settled at 281.52, appreciating by three paisa, or 0.01%, against the greenback. Last week, the rupee had also strengthened, closing at 281.55.